1

Filed 3/17/21 Kivel v. McInerney CA4/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for 

publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication

or ordered published for purposes of rule 8.1115. 

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

SCOTT KIVEL et al.,

Plaintiffs, Cross-defendants and 

Appellants,

v.

PATRICK MCINERNEY et al.,

Defendants, Cross-complainants 

and Appellants.

 D074173

 (Super. Ct. No. 37-2016-

 00028099)

APPEALS from judgment and orders of the Superior Court of San 

Diego County, Katherine Bacal, Judge. Affirmed in part, reversed in part, 

and remanded with directions.

Scott N. Kivel, in pro. per., and for Plaintiff, Cross-defendant, and 

Appellant Lia Lund.
2

Schwerdtfeger Law Group, Sean D. Schwerdtfeger and Catherine L. 

Coughlin for Defendants, Cross-complainants, and Appellants.

Defendants Patrick McInerney (Patrick), McInerney & Co, Inc. (M&C), 

McInerney & Associates, Inc. (M&A), and McInerney Architects (together 

Defendants) appeal a judgment finding M&C and Patrick liable for 

reimbursement under Business and Professions Code section 7031, 

subdivision (b)1 (§ 7031(b)) for amounts plaintiffs Scott Kivel and Lia Lund 

(Plaintiffs) paid to M&C for construction of a single family residence, and a 

postjudgment order adding M&A as a judgment debtor. The trial court found 

that M&C was not a licensed contractor at all times when it performed 

services for Plaintiffs that required a contractor’s license. On appeal, 

Defendants contend that the trial court erred by: (1) granting Plaintiffs’ 

motion for summary adjudication of their section 7031(b) cause of action 

against M&C; (2) granting Plaintiffs’ motion for a nonsuit on Defendants’ 

cross-claims for compensation for architectural services provided to Plaintiffs

by M&C and Patrick and instructing the jury that Patrick was not a licensed 

architect when he performed services for Plaintiffs that required an 

architect’s license; (3) finding that Patrick was liable for the judgment 

amount as an alter ego of M&C; (4) granting Plaintiffs’ request to add, and 

amending the judgment to add, M&A as a judgment debtor, as a successor 

corporation to M&C; and (5) awarding Plaintiffs attorney fees pursuant to 

Code of Civil Procedure section 1029.8 (§ 1029.8). Plaintiffs cross-appeal, 

contending that the court erred by denying their request for an award of 

1 All statutory references are to the Business and Professions Code 

unless otherwise specified.
3

prejudgment interest pursuant to Civil Code section 3287, subdivision (a) 

(§ 3287(a)).

We conclude that the trial court erred by awarding Plaintiffs attorney 

fees pursuant to section 1029.8 and denying Plaintiffs’ request for 

prejudgment interest pursuant to section 3287(a). Accordingly, we reverse 

the judgment and orders to that extent, affirm them in all other respects, and 

remand the matter with directions that the court issue a new order and enter 

a new judgment reflecting our decision.

FACTUAL AND PROCEDURAL BACKGROUND

In June 2013, Plaintiffs hired M&C, a corporation wholly owned by 

Patrick, to design a new single-family residence for a property that Plaintiffs 

had recently purchased in La Jolla. At that time, neither M&C nor Patrick 

was licensed in California to perform architectural services.2

In March 2014, Plaintiffs and M&C agreed that M&C would serve as 

Plaintiffs’ general contractor in the construction of their new residence. At 

that time, neither M&C nor Patrick was licensed in California to perform 

contractor services. M&C then began performing general contractor services, 

including soliciting bids from subcontractors, hiring a subcontractor, and 

filing a permit application for the demolition or deconstruction of the existing 

residence on the property. In the fall of 2015, with construction of the new 

residence not yet complete, a dispute arose between Plaintiffs and M&C, 

which led to M&C’s discontinuation of its general contractor services on 

Plaintiffs’ new residence.

2 Patrick was apparently registered at that time as an architect in the 

United Kingdom.
4

In August 2016, Plaintiffs filed the instant action against Defendants, 

alleging causes of action for: (1) disgorgement of architect’s fees; 

(2) disgorgement of contractor’s fees; (3) breach of architect contract; 

(4) breach of construction contract; (5) negligence; (6) intentional 

misrepresentation; (7) breach of fiduciary duties; and (8) accounting. In 

September, Defendants filed a cross-complaint against Plaintiffs. In October, 

Defendants filed their operative amended cross-complaint, alleging causes of 

action for: (1) breach of oral design contract; (2) breach of oral construction 

contract; (3) quantum meruit - design services; and (4) quantum meruit -

construction contract.

Plaintiffs filed a motion for summary adjudication on the second cause 

of action of their complaint as to only M&C and on the second and fourth 

causes of action of Defendants’ amended cross-complaint. The court issued 

an order granting Plaintiffs’ motion for summary adjudication, finding that

there were no triable issues of material fact regarding whether M&C was 

licensed as a contractor at all times during its performance of contractor 

services and that M&C was not so licensed at all times. The court therefore 

found that under section 7031(b), Plaintiffs were entitled to reimbursement 

(or disgorgement) of all amounts that they had paid to M&C for construction 

services and materials.

During November and December 2017, a jury trial was conducted on 

the remaining causes of action of Plaintiffs’ complaint and Defendants’ 

amended cross-complaint. During trial, Plaintiffs moved for a judgment of 

nonsuit on Defendants’ first and third cross-claims. The court granted 

Plaintiffs’ motion and thereafter instructed the jury that Patrick had 

performed architectural services without a California architect’s license. The 

jury returned a special verdict, answering 42 questions on the remaining 
5

causes of action alleged in Plaintiffs’ complaint and Defendants’ amended 

cross-complaint. In particular, the jury found that M&C had breached its 

construction contract with Plaintiffs and overcharged Plaintiffs by $325,000. 

The jury also found that there were no construction defects and rejected 

Plaintiffs’ causes of action against Defendants for negligence, intentional 

misrepresentation, and breach of fiduciary duty. In a bifurcated bench trial, 

the court subsequently found that Patrick was an alter ego of M&C and 

therefore, personally liable for the judgment amount. Plaintiffs subsequently 

elected the remedy of reimbursement under their section 7031(b) cause of 

action in lieu of the damages awarded by the jury for their cause of action for 

breach of the construction contract.

On February 28, 2018, the trial court entered judgment for Plaintiffs 

and against M&C and Patrick in the amount of $2,732,627.87 on Plaintiffs’ 

section 7031(b) cause of action, reflecting the total amount paid by Plaintiffs 

to M&C. The court subsequently awarded Plaintiffs attorney fees in the 

amount of $155,008.50 and costs in the amount of $52,689.13. The court also 

granted Plaintiffs’ motion to add M&A as a judgment debtor. The court 

denied Plaintiffs’ request for an award of prejudgment interest pursuant to 

section 3287(a). On January 25, 2019, the court entered a second amended 

judgment against M&C, Patrick, and M&A for a total amount of 

$2,940,325.50. That judgment did not award Defendants any relief on their 

amended cross-complaint.

Defendants filed notices of appeal challenging the February 28, 2018 

judgment, the August 3, 2018 order awarding Plaintiffs attorney fees, and 

the January 25, 2019 second amended judgment. Plaintiffs filed a notice of 

cross-appeal challenging the November 9, 2018 order denying their motion 

for prejudgment interest.
6

DISCUSSION

DEFENDANTS’ APPEAL

I

Order Granting Plaintiffs’ Motion for Summary Adjudication

of Their Section 7031(b) Cause of Action

Defendants contend that the trial court erred by granting Plaintiffs’ 

motion for summary adjudication against M&C on Plaintiffs’ second cause of 

action for reimbursement under section 7031(b) for amounts they paid to 

M&C for construction services and materials. In particular, Defendants 

argue that a motion for summary adjudication is unavailable under Code of 

Civil Procedure section 437c, subdivision (f)(1) (§ 437c(f)(1)) unless the motion 

disposes of the cause of action against all defendants and not just a single 

defendant. They also contend that the court erred by finding that there were 

no triable issues of material fact as to Plaintiffs’ second cause of action and 

the second and fourth causes of action of Defendants’ amended crosscomplaint and that Plaintiffs were entitled to summary adjudication on those

causes of action.

A

Section 7031 generally. The Contractors State License Law (CSLL) 

(§ 7000 et seq.) “is a comprehensive legislative scheme governing the 

construction business in California. [It] provides that contractors performing 

construction work must be licensed unless exempt. [Citations.] ‘The 

licensing requirements provide minimal assurance that all persons offering 

such services in California have the requisite skill and character, understand 

applicable local laws and codes, and know the rudiments of administering a 

contracting business. [Citations.]’ [Citation.] The [CSLL is] designed to 
7

protect the public from incompetent or dishonest providers of building and 

construction services. [Citation.]” (White v. Cridlebaugh (2009) 178 

Cal.App.4th 506, 517 (White).)

The CSLL’s “statutory scheme encourages licensure by subjecting 

unlicensed contractors to criminal penalties and civil remedies. [Citation.] 

The civil remedies ‘affect the unlicensed contractor’s right to receive or retain 

compensation for unlicensed work.’ [Citation.] The hiring party is entitled to 

enforce these remedies through a defensive ‘shield’ or an affirmative ‘sword.’ 

[Citation.]” (Alatriste v. Cesar’s Exterior Designs, Inc. (2010) 183 Cal.App.4th 

656, 664 (Alatriste).) “The shield, contained in section 7031(a), was enacted 

more than 70 years ago, and provides that a party has a complete defense to 

claims for compensation made by a contractor who performed work without a 

license, unless the contractor meets the requirements of the statutory 

substantial compliance doctrine. [Citation.]”3 (Alatriste, at pp. 664-665, 

fn. omitted.) Section 7031, subdivision (a) (§ 7031(a)), the “shield” provision, 

currently provides:

“[N]o person engaged in the business or acting in the 

capacity of a contractor, may bring or maintain any action, 

or recover in law or equity in any action, in any court of 

this state for the collection of compensation for the 

performance of any act or contract where a license is 

required by this chapter without alleging that [he or she]

was a duly licensed contractor at all times during the 

3 Section 7031, subdivision (e), “the substantial compliance exception, 

provides relief only in very narrow specified circumstances . . . .” (Alatriste, 

supra, 183 Cal.App.4th at p. 665.) Because Defendants do not assert on 

appeal that the substantial compliance exception applies in this case, we do 

not discuss its provisions or its potential application to the performance of 

contracting acts by M&C.
8

performance of that act or contract regardless of the merits 

of the cause of action brought by the person . . . .”

“The California Supreme Court has long given a broad, literal 

interpretation to section 7031(a)’s shield provision. [Citation.] The court has 

held that section 7031(a) applies even when the person for whom the work 

was performed knew the contractor was unlicensed. [Citation.]” (Alatriste, 

supra, 183 Cal.App.4th at p. 665.) In MW Erectors, Inc. v. Niederhauser 

Ornamental & Metal Works Co., Inc. (2005) 36 Cal.4th 412 (MW Erectors), 

the court stated: “[S]ection 7031(a) bars a person from suing to recover 

compensation for any work he or she did under an agreement for services 

requiring a contractor’s license unless proper licensure was in place at all

times during such contractual performance.” (Id. at p. 419.) Because the 

Legislature has determined that the importance of deterring unlicensed 

persons from engaging in the contracting business outweighs any harshness 

between the parties, the bar of section 7031(a) applies regardless of the 

equities. (Id. at p. 423.) “In denying recovery to unlicensed contractors 

courts have rationalized the harsh impact on some competent, but 

unlicensed, persons by deferring to the legislative determination that 

deterrence outweighs the cumulative effect of the penalty suffered by the 

contractor and the unjust enrichment obtained by the property owner.” 

(Executive Landscape Corp. v. San Vicente Country Villas IV Assn. (1983) 145 

Cal.App.3d 496, 498.)

“In 2001, the Legislature amended section 7031 to add a sword remedy 

to the hiring party’s litigation arsenal. That sword remedy, contained in 

section 7031(b), currently reads: ‘Except as provided in subdivision (e), a 

person who utilizes the services of an unlicensed contractor may bring an 

action in any court of competent jurisdiction in this state to recover all 
9

compensation paid to the unlicensed contractor for performance of any act or 

contract.’ ” (Alatriste, supra, 183 Cal.App.4th at p. 666, italics added.) In 

White, the court concluded that the Legislature intended that section 7031(a) 

and section 7031(b) be interpreted in a consistent manner so that the same 

remedy applies regardless of whether the unlicensed contractor is the 

plaintiff or defendant. (White, supra, 178 Cal.App.4th at pp. 519-520; see 

also Alatriste, at p. 666.) “In short, those who have not paid [the unlicensed 

contractor] are protected from being sued for payment and those who have 

paid may recover all compensation delivered.” (White, at p. 520.) Further, 

“section 7031(b) applies to allow full reimbursement even if the contractor 

obtained a license after he or she began performing the work.” (MW Erectors, 

supra, 36 Cal.4th at p. 429, fn. 8; Alatriste, at p. 671.) “[S]ection 7031(b) 

provides a reimbursement right for all amounts paid to an unlicensed 

contractor if the contractor was unlicensed at any time during the 

performance . . . .” (Alatriste, at p. 669, italics added.) Because “the 

Legislature intended that section 7031(b) be a mirror image of section 

7031(a), . . . section 7031(b) does not permit an offset for work performed 

after a license is obtained . . . .” (Alatriste, at p. 672.) “[T]he authorization of 

recovery of ‘all compensation paid to the unlicensed contractor for 

performance of any act or contract’ means that unlicensed contractors are 

required to return all compensation received without reductions or offsets for 

the value of material or services provided.” (White, at pp. 520-521.) In 

addition, “under section 7031(b), a party is entitled to reimbursement for 

amounts paid to an unlicensed contractor even if the party knew the 

contractor was unlicensed.” (Alatriste, at p. 668.) From an equitable 

viewpoint, the reimbursement remedy provided by section 7031(b) could

therefore, under some circumstances, be considered draconian. 
10

B

Summary adjudication generally. “Motions for summary adjudication 

are procedurally identical to motions for summary judgment [citation], and 

our review of rulings on those motions is de novo [citation].” (Dunn v. County 

of Santa Barbara (2006) 135 Cal.App.4th 1281, 1290 (Dunn).) Under section 

437c(f)(1), “[s]ummary adjudication is warranted only if the motion 

completely disposes of a cause of action, an affirmative defense, a claim for 

damages, or an issue of duty.” (Dunn, at p. 1290.)

“The purpose of the law of summary judgment [or summary 

adjudication] is to provide courts with a mechanism to cut through the 

parties’ pleadings in order to determine whether, despite their allegations, 

trial is in fact necessary to resolve their dispute.” (Aguilar v. Atlantic 

Richfield Co. (2001) 25 Cal.4th 826, 843 (Aguilar).) Aguilar clarified the 

standards that apply to motions for summary judgment and summary 

adjudication. (Id. at pp. 843-857.) Generally, if all of the papers submitted 

by the parties show that there is no triable issue of material fact and that the 

“ ‘moving party is entitled to a judgment [or summary adjudication] as a 

matter of law,’ [citation]” the court must grant the motion for summary 

judgment or summary adjudication. (Id. at p. 843.) Aguilar stated:

“If a party moving for summary judgment [or summary 

adjudication] in any action . . . would prevail at trial 

without submission of any issue of material fact to a trier of 

fact for determination, then he should prevail on summary 

judgment [or summary adjudication]. In such a case, . . . 

the ‘court should grant’ the motion ‘and avoid a . . . trial’ 

rendered ‘useless’ by nonsuit or directed verdict or similar 

device.” (Aguilar, supra, 25 Cal.4th at p. 855.)
11

On appeal, the appellant has the burden to show that the trial court 

erred in granting a motion for summary judgment or summary adjudication. 

(Bains v. Moores (2009) 172 Cal.App.4th 445, 455.) It is therefore appellant’s 

burden to affirmatively demonstrate error by showing that there are triable 

issues of material fact that preclude summary judgment or summary 

adjudication. (Ibid.) “On appeal after a motion for summary judgment [or 

summary adjudication] has been granted, we review the record de novo, 

considering all the evidence set forth in the moving and opposition papers 

except that to which objections have been made and sustained.” (Guz v. 

Bechtel National, Inc. (2000) 24 Cal.4th 317, 334; see Saelzler v. Advanced 

Group 400 (2001) 25 Cal.4th 763, 767.) “On appeal, we exercise ‘an 

independent assessment of the correctness of the trial court’s ruling, applying 

the same legal standard as the trial court in determining whether there are 

any genuine issues of material fact or whether the moving party is entitled to 

judgment [or summary adjudication] as a matter of law.’ [Citation.] ‘The 

appellate court must examine only papers before the trial court when it 

considered the motion, and not documents filed later. [Citation.] Moreover, 

we construe the moving party’s affidavits strictly, construe the opponent’s 

affidavits liberally, and resolve doubts about the propriety of granting the 

motion in favor of the party opposing it.’ ” (Seo v. All-Makes Overhead Doors

(2002) 97 Cal.App.4th 1193, 1201-1202.) Although we generally review de 

novo, or independently, a trial court’s ruling on a motion for summary 

judgment or summary adjudication, we apply the abuse of discretion 

standard in reviewing the trial court’s rulings on a party’s evidentiary 

objections. (Powell v. Kleinman (2007) 151 Cal.App.4th 112, 122; Carnes v. 

Superior Court (2005) 126 Cal.App.4th 688, 694.)
12

C

Procedural background. The second cause of action of Plaintiffs’ 

complaint alleged that in March 2014 Patrick represented to Plaintiffs that 

Defendants were general contractors duly licensed in California. It alleged 

that in April 2014 Plaintiffs entered into an oral contract with Defendants for 

construction of Plaintiffs’ new single-family residence on their La Jolla 

property. It further alleged that because Defendants were not duly licensed 

contractors in California when they performed contractor services from 

March 2014 and thereafter, under section 7031 Defendants must disgorge all 

sums Plaintiffs paid them, “which amount is at least $2,732,627.87, plus 

interest.”

Defendants’ amended cross-complaint alleged causes of action against 

Plaintiffs for breach of oral construction contract (second cause of action) and 

quantum meruit based on the construction contract (fourth cause of action). 

Their second cause of action alleged that on or about April 30, 2014, M&C 

and Plaintiffs entered into an oral contract for M&C to provide general 

contracting services in the construction of Plaintiffs’ new residence “on a cost 

plus contract basis” (i.e., costs of construction plus 15 percent). It further 

alleged that Plaintiffs breached the oral contract by failing to pay M&C for 

the construction services rendered and materials supplied, causing M&C 

damages of at least $764,000. Defendants’ fourth cause of action alleged that 

the reasonable value of the materials and services provided by M&C to 

Plaintiffs for which Plaintiffs had not paid was at least $764,000 and that it 

would be inequitable to unjustly enrich Plaintiffs with materials and services 

in that amount.
13

Plaintiffs filed a motion for summary adjudication of their second cause 

of action against M&C and the second and fourth causes of action alleged 

against them in Defendants’ amended cross-complaint. Plaintiffs argued that 

there were no triable issues of material fact as to their allegation that M&C 

did not hold a valid contractor’s license at all times during its performance of 

their oral construction contract and therefore, M&C was liable under section 

7031(b) for disgorgement of all compensation that Plaintiffs had paid to it. 

Plaintiffs likewise argued that there were no triable issues of material fact as 

to their allegation that M&C did not hold a valid contractor’s license at all 

times during its performance of their oral construction contract and 

therefore, pursuant to section 7031(a), M&C could not maintain an action to 

recover compensation for its acts. In support of their motion for summary 

adjudication, Plaintiffs submitted a memorandum of points and authorities;

declarations of Kivel, Lund, and their counsel Christopher A. Elliott; exhibits 

to those declarations; a separate statement of undisputed material facts; and 

a request for judicial notice.

In their separate statement of undisputed material facts, Plaintiffs 

asserted that it was undisputed that in March 2014 M&C requested bids for 

demolition of the existing home on Plaintiffs’ property and for construction of 

their new home.4 They asserted that demolition of the existing home began

4 Plaintiffs also asserted that it was undisputed that on March 24, 2014, 

Patrick applied for a combination building permit for their new home. They 

also asserted that on April 3, 2014, M&C hired someone to excavate the gas 

line on Plaintiffs’ property. In support of those assertions, Plaintiffs 

submitted an email dated April 1, 2014, from Patrick to Lund, in which he 

stated that he had met with SDG&E and had “organized for someone to be at 

the house tomorrow to unearth the gas line at the sidewalk and the meter.” 

He stated that SDG&E would then return to the site to cut the gas line and 

stop the gas service at the sidewalk and remove the meter. 
14

in April 2014. Plaintiffs asserted that on May 2, 2014, M&C sent them a 

“construction invoice” dated April 30, 2014, in the amount of $50,000, which 

they paid by a check dated May 8, 2014. They asserted that on May 9, 2014, 

a permit was issued in Patrick’s name for demolition of the existing home. 

Importantly, Plaintiffs asserted that it was undisputed that M&C was not 

actively licensed as a contractor in California until May 22, 2014. Although 

Patrick obtained a California contractor’s license in 2008, he placed his 

license on inactive status in 2012 and reactivated and reassigned it to M&C 

on May 22, 2014.

In support of their separate statement, Plaintiffs submitted exhibits, 

including an email dated March 30, 2014, from Patrick to Lund, updating her 

on deconstruction of the existing home and stating that he had received a

reply from Israel at RRR Green Demolition (RRR) offering to reduce his price 

by $2,000, and that he had also asked Dirt Cheap Demolition to confirm that 

its bid included the perimeter walls in its pricing. Patrick stated: “It is likely 

we will sub-contract with RRR Green Demolition (Israel)” and that he had 

asked to meet Israel on the site the following Tuesday to review the work. 

Plaintiffs also submitted an email dated April 1, 2014, from Patrick to Lund 

in which Patrick stated that he had “received a revised bid from Dirt Cheap 

Demo (increased by $5K) and a revised bid from Israel (reduced by $3K). The 

two bids are now within $4K with Israel’s work linking directly to the ReCon 

company. So I plan to subcontract Israel to move this forward.” (Italics 

added.) Patrick also stated that he had “asked each of the subcontracting 

firms to provide time lines in respect to each item of work.”5

5 Plaintiffs also submitted an email dated April 13, 2014, from Patrick to 

Lund, stating that “[w]e have been organizing all the trades as we move into 

this new phase.” Patrick also updated Lund on the status of the building 
15

Plaintiffs also submitted an email dated May 2, 2014, from Patrick to 

Plaintiffs, attaching three invoices. Patrick explained that the third invoice 

was “an on-account payment to cover the first subcontractors, deconstruction, 

shoring, and site set-up.” Plaintiffs submitted a copy of “Invoice No. 441F” 

from M&C to Plaintiffs, dated April 30, 2014, which was titled “Construction 

Invoice.” That construction invoice was in the amount of $50,000, which was 

“[n]ow [d]ue,” and stated:

“On Account Payment of $50,000 for site-set [sic] up costs 

related to [the property].

“Temporary Construction Fence

“Temporary Toilet

“Shoring (Subcontract)

“Deconstruction (Subcontract)”

Plaintiffs also submitted a copy of a check dated May 8, 2014, in the amount 

of $50,000 from Kivel to M&C, which showed that it had been paid by Kivel’s 

bank on May 15, 2014.

Plaintiffs submitted a copy of the demolition permit issued on May 9, 

2014, by City to Patrick, as the permit holder, for demolition of the existing 

home and garage.6 Plaintiffs also submitted Elliott’s declaration, which 

permit application that he had filed with the City of San Diego (City), 

explaining that the City was “running behind schedule” and that he had 

“worked through the weekend to answer all of the major issues.” Patrick also 

stated that he had received a bid from a local solar firm and would review it 

and forward it to Plaintiffs.

6 Plaintiffs also submitted a copy of a City document, showing its 

approval on May 27, 2014, of the combination building permit to Patrick, as 

the permit holder, for construction of the new residence, and indicating that 

the application for the permit had been filed on March 24, 2014.
16

attached as exhibits documents produced by Defendants pursuant to 

Plaintiffs’ requests for production served in their action against Defendants. 

Those exhibits included copies of bids from demolition subcontractors. On 

March 20, 2014, J.T.H, Inc. submitted separate bids for demolition of the 

existing house and garage and for the breaking and removal of all concrete. 

On March 20, 2014, RRR submitted separate bids for deconstruction of the 

existing house and garage and for removal of the hardscape (e.g., driveway, 

foundations, sidewalks, and retaining walls). On March 26, 2014, RRR 

submitted an additional bid for removal of the hardscape.7 All of the 

foregoing subcontractor bids were submitted to Patrick. Elliott also attached 

a certification of records, dated April 14, 2017, from the custodian of records 

for the California Contractors State License Board, stating that Patrick was 

issued a Class B general building contractor’s license on October 22, 2008, 

which was renewed as inactive on November 1, 2012, and became active and 

was reassigned to M&C on May 22, 2014.

In its opposition to Plaintiffs’ motion for summary adjudication, M&C

submitted a memorandum of points and authorities, arguing that there were 

triable issues of material fact that precluded summary adjudication. In 

particular, M&C argued that there were disputed facts regarding whether it 

had performed contracting services prior to the issuance of its contractor’s 

license on May 22, 2014. In support of its opposition, M&C submitted a 

request for judicial notice of the application for a demolition permit signed by 

7 Other documents produced by Defendants included bids dated March 

26, 2014, and April 8, 2014, from a window and door installer (R.H. Fitch 

Incorporated) and a bid dated March 29, 2014, from an excavating company 

(Mike Lloyd Excavating, Inc.).
17

Patrick on May 7, 2014, identifying M&C as the permit holder and RRR as 

the demolition subcontractor.

M&C also submitted a separate statement responding to Plaintiffs’ 

separate statement of undisputed material facts. In particular, M&C

disputed that the existing home was to be demolished, asserting that it was 

instead to be deconstructed for salvage of many of its reusable materials, and 

asserted that Plaintiffs had instructed M&C to begin investigating 

deconstruction vendors in March 2014.8 M&C disputed that deconstruction 

of the existing home began in April 2014, asserting instead that 

deconstruction by RRR began after the demolition permit was issued on May 

7, 2014. M&C agreed with Plaintiffs’ assertion that Plaintiffs had paid M&C 

$2,732,627.87 for materials supplied and services rendered in construction of 

their new home. M&C asserted that it did not begin working as a contractor 

prior to receipt of its license on May 22, 2014. However, M&C did not dispute 

that Patrick’s contractor’s license was placed on inactive status in 2008 and 

reactivated and reassigned to M&C on May 22, 2014. M&C also did not 

dispute that it was not a licensed architect when it performed services for 

Plaintiffs.

In its separate statement, M&C also asserted its own undisputed 

material facts, including that on March 20, 2014, RRR submitted a 

deconstruction proposal and that in April 2014 Plaintiffs decided that they 

wanted to use RRR to deconstruct the existing home. M&C also asserted 

8 M&C also disputed that it applied for a combination building permit on 

March 24, 2014, asserting instead that it did not apply for such permit until 

May 27, 2014. M&C also clarified that it did not hire anyone to excavate the 

gas line, asserting instead that Patrick had met with SDG&E to locate the 

gas line.
18

that by April 2014, Plaintiffs had indicated that they wanted M&C to serve 

as their general contractor and Patrick informed them that he would do so, 

but that he would have to reactivate his contractor’s license and transfer it to 

M&C before performing any general contracting services.

Also in support of its opposition, M&C submitted Patrick’s declaration, 

which stated that the $50,000 construction invoice transmitted to Plaintiffs 

on May 2, 2014, was an “on-account payment [sic] for future construction site 

set up costs.” His declaration also stated that on May 7, 2014, M&C 

submitted an application for a demolition permit identifying M&C as the 

permit holder and RRR as the contractor, and that on May 9, 2014, RRR 

“commenced deconstruction of the existing structure.” Also in support of its 

opposition, M&C submitted declarations from Paul Benton, a licensed 

architect, and William M. Lyons, a licensed contractor.

In reply to M&C’s opposition, Plaintiffs submitted a supplemental 

request for judicial notice and Elliott’s supplemental declaration. In 

particular, Elliott’s declaration stated that on August 1 and 2, 2017, his 

colleague Hayward Kaiser took Patrick’s deposition in this case. A copy of 

excerpts from the deposition transcript were attached to the declaration. 

Kaiser asked Patrick at his deposition: “Did you charge a markup on the 

expenses and costs you paid in connection with the deconstruction of the old 

house?” Patrick asked Kaiser to repeat the question. Kaiser restated his 

question: “Did you charge a 15 percent markup on the costs [M&C] incurred 

on the deconstruction of the old house?” Patrick answered: “Yes.” Kaiser 

then asked: “Do you think that was appropriate?” Patrick answered: “I do.” 

Kaiser asked: “Why?” Patrick answered: “Because I procured, managed, 

and paid for the deconstruction of the old house.” (Italics added.)
19

Plaintiffs’ supplemental request for judicial notice asked that the court 

take judicial notice of a certified copy of City’s record of permit-related 

appointments for their property through May 28, 2014. That record reflected 

that a demolition permit was issued on May 9, 2014.9

On August 30, 2017, the trial court granted Plaintiffs’ motion for 

summary adjudication and, in so doing, granted the parties’ requests for 

judicial notice. The court stated:

“[Patrick] is the president and sole shareholder of M&C. 

[Citation.] [Patrick] had a contractor’s license that went 

inactive in 2012. [Citation.] On April 30, 2014, [P]laintiffs 

and M&C entered into an oral contract to provide general 

contracting services in connection with the home. 

[Citations.] On May 22, 2014, [Patrick] reactivated the 

license and reassigned it to M&C. [Citation.]

“Under section 7031(a), . . . [t]he question . . . is whether 

there is any triable issue of material fact as to whether 

M&C was licensed at all times during contractual 

performance. There is not.

“On April 30, 2014 . . . , M&C sent [P]laintiffs a 

construction invoice for $50,000 for ‘site set-up costs’ 

including a temporary construction fence, shoring and 

deconstruction. [Citation.] Engaging in ‘administrative 

duties’ such as ‘soliciting and accepting payment,’ are ‘in 

the capacity of’ a contractor[] and require a license. 

[Citation.] In other words, there was contractual 

performance -- not just execution -- before M&C was 

licensed.

9 That record also reflected that on March 18, 2014, a building permit 

application was submitted for a new single-family dwelling unit and on 

March 24, 2014, seven sets of drawings were submitted in support of that 

application. It further reflected that on May 27, 2014, the building permit for 

the new single-family dwelling unit was issued.
20

“ . . . A ‘contractor’ includes ‘any person, who undertakes to

or offers to undertake to or purports to have the capacity to 

undertake or submits a bid’ to construct, alter or repair any 

building. [Citation.] Thus, a valid license was required 

when [P]laintiffs were billed for construction work. The 

fact that the construction invoice also notes that some of 

the work will be subcontracted out is immaterial. ‘The 

California courts have also long held that those who enter 

into construction contracts must be licensed, even when 

they themselves do not do the actual work under the 

contract.’ [Citation.]

“M&C began soliciting bids for deconstruction of the 

existing house in March 2014. [Citation.] On May 7, 2014, 

[Patrick] submitted an application for a demolition permit 

listing [RRR] as the contractor. [Citation.] Deconstruction 

began on May 9, 2014. [Citation.] Contractors must be 

licensed when they hire subcontractors. [Citation.] 

[Patrick] testified that M&C was entitled to be 

compensated for deconstruction because he ‘procured, 

managed, and paid for the deconstruction.’ [Citation.] 

M&C acted as a contractor by soliciting bids for 

deconstruction, hiring [RRR] and applying for a demolition 

permit. The fact that [RRR] did the actual deconstruction 

work does not exempt M&C from licensing requirements.

“ . . . Thus there is no triable issue of fact that M&C acted 

as a contractor during a portion of the relevant time 

without having a license. . . .

“Because M&C is not entitled to recover for the outstanding 

construction costs allegedly owed, it follows that [P]laintiffs 

are entitled to recover their construction costs. 

Accordingly, the motion for summary adjudication is 

granted.”

After trial, Plaintiffs elected the section 7031(b) remedy of 

reimbursement under their second cause of action in lieu of the damages 

awarded by the jury for their cause of action for breach of the construction 
21

contract. The court subsequently entered the second amended judgment for 

Plaintiffs and against M&C, Patrick, and M&A in the amount of 

$2,732,627.87 on Plaintiffs’ section 7031(b) cause of action.

D

Interpretation of section 437c(f)(1). In asserting that the trial court 

erred by granting Plaintiffs’ motion for summary adjudication against M&C 

on Plaintiffs’ second cause of action for reimbursement under section 7031(b), 

which was alleged against all Defendants, Defendants initially argue that a 

motion for summary adjudication is unavailable under section 437c(f)(1) 

unless the motion disposes of the cause of action against all defendants and 

not just a single defendant. Defendants rely on the language of section 

437c(f)(1), which provides:

“A party may move for summary adjudication as to one or 

more causes of action within an action, one or more 

affirmative defenses, one or more claims for damages, or 

one or more issues of duty, if the party contends that the 

cause of action has no merit, that there is no affirmative 

defense to the cause of action, that there is no merit to an 

affirmative defense to any cause of action, that there is no 

merit to a claim for damages, as specified in Section 3294 of 

the Civil Code, or that one or more defendants either owed 

or did not owe a duty to the plaintiff or plaintiffs. A motion 

for summary adjudication shall be granted only if it 

completely disposes of a cause of action, an affirmative 

defense, a claim for damages, or an issue of duty.” (Italics 

added.)

Defendants misconstrue the plain language of section 437c(f)(1) in arguing

that a motion for summary adjudication must completely dispose of a cause of 

action against all defendants and not just as to a single defendant. To the 

contrary, there is no language in section 437c(f)(1) that requires that
22

summary adjudication completely dispose of a cause of action against all

defendants.

In interpreting a statute, “our fundamental objective is to ascertain the 

legislative intent.” (Alatriste, supra, 183 Cal.App.4th at p. 663.) We initially 

focus on the words of the statute because statutory language is generally the 

most reliable indicator of legislative intent. (Ibid.) The words of the statute 

should be given their ordinary and usual meaning and should be construed in 

their statutory context. (Ibid.; MW Erectors, supra, 36 Cal.4th at p. 426.) If 

the statutory language is unambiguous, we presume that the Legislature 

intended what it stated and the plain meaning of the statute governs. (MW 

Erectors, at p. 426.) On appeal, we independently review the legal question of 

the proper interpretation of a statute. (Alatriste, at p. 664.)

“Prior to the 1990 amendment to the summary adjudication statute, 

parties could seek summary adjudication on any issues raised in a case. The 

1990 amendment limited summary adjudication motions to a cause of action, 

an affirmative defense, a claim for punitive damages, or an issue of duty. 

[Citation.] . . . The clear purpose of the amendment was to ‘ “stop the practice 

of adjudication of facts or adjudication of issues that do not completely 

dispose of a cause of action or a defense.” ’ [Citation.]”10 (Paramount 

10 In 1990, section 437c(f) was amended to provide in pertinent part that 

“any party may move for summary adjudication as to [a] cause or causes of 

action . . . .” (Lilienthal & Fowler v. Superior Court (1993) 12 Cal.App.4th 

1848, 1851-1852 (Lilienthal).) In 1993, section 437c(f) was amended and 

renumbered as section 437c(f)(1), reading substantially as it reads today. 

(Stats.1993, ch. 276, § 1; see Hood v. Superior Court (1995) 33 Cal.App.4th 

319, 323 [“ ‘A party may move for summary adjudication as to one or more 

causes of action . . . . A motion for summary adjudication shall be granted 

only if it completely disposes of a cause of action . . . .’ ”].)
23

Petroleum Corp. v. Superior Court (2014) 227 Cal.App.4th 226, 241-242

(Paramount).)

By its express language, section 437c(f)(1) allows “[a] party” to file a 

motion for summary adjudication, clearly indicating that a single plaintiff or 

defendant may file such a motion. Thus, in any action in which there are 

multiple plaintiffs or defendants, one plaintiff or one defendant may file a 

motion for summary adjudication. There is nothing in the language of section 

437c(f)(1) that precludes a plaintiff or defendant from filing a motion for 

summary adjudication of a cause of action as to only one of multiple 

defendants or one of multiple plaintiffs. Further, section 437c(f)(1) provides 

that a party may file a motion for summary adjudication as to a cause of 

action if the party asserts, inter alia, “that one or more defendants either 

owed or did not owe a duty to the plaintiff or plaintiffs.” (Italics added.) That 

language plainly indicates that summary adjudication may be granted in 

favor of, or against, “one or more defendants” if there is no triable issue as to 

whether one or more defendants owed a duty to the plaintiff or plaintiffs. 

(§ 437c(f)(1).) Based on the plain language of section 437c(f)(1), we conclude 

that the Legislature intended that summary adjudication of a cause of action 

may be granted against only one of multiple defendants named in that cause 

of action if there are no triable issues of material fact on that cause of action 

as to that defendant and the plaintiffs are entitled to judgment on that cause 

of action. (Cf. Paramount, supra, 227 Cal.App.4th at p. 243 [plaintiff can 

obtain summary adjudication of cause of action if plaintiff establishes each 

element of cause of action entitling plaintiff to judgment on that cause of 

action].)

Contrary to Defendants’ assertion, there is nothing in the language of 

section 437c(f)(1) that requires all plaintiffs or all defendants to be either the 
24

moving parties or opposing parties on a motion for summary adjudication of a 

cause of action. If Defendants’ position were correct, we would expect that 

they could cite, or that our research would reveal, a published case so holding 

during the almost 30-year period since the current language of section 

437c(f)(1) was enacted.11 However, our research shows that courts have 

affirmed summary judgments and summary adjudications against one of 

multiple defendants or in favor of one of multiple plaintiffs. (See, e.g., Lyons 

v. Security Pacific Nat. Bank (1995) 40 Cal.App.4th 1001, 1006, 1023 

[affirmed summary judgment in favor of one of two defendants]; Orange 

County Water Dist. v. Sabic Innovative Plastics US, LLC (2017) 14 

Cal.App.5th 343, 417, fn. 38 [affirmed summary adjudication in favor of one 

of multiple defendants]; Archdale v. American Internat. Specialty Lines Ins. 

Co. (2007) 154 Cal.App.4th 449, 473 [affirmed summary judgment in favor of 

one of multiple plaintiffs].)

Further, Code of Civil Procedure section 579 provides: “In an action 

against several defendants, the court may, in its discretion, render judgment 

against one or more of them, leaving the action to proceed against the others, 

11 Although Defendants cite Lilienthal, supra, 12 Cal.App.4th 1848, as 

their primary case in support of their position, that case is inapposite to this 

case and did not address the question whether a motion for summary 

adjudication may be granted against one of multiple defendants or one of 

multiple plaintiffs. Rather, Lilienthal concluded that because a cause of 

action alleged in the complaint in that case combined two separate and 

distinct claims (i.e., primary rights or theories of liability), the trial court 

erred by refusing to rule on the plaintiffs’ motion for summary adjudication of 

one of the two claims that were, in effect, two separate causes of action. (Id. 

at pp. 1850, 1854.) Because Lilienthal is inapposite to the issue in this case, 

it does not persuade us to reach a contrary conclusion regarding our 

interpretation of section 437c(f)(1).
25

whenever a several judgment is proper.” Although that statute does not 

expressly apply to a summary adjudication against one or more of several 

defendants, one can infer from its provisions that in enacting section 

437c(f)(1), the Legislature did not intend to preclude a summary adjudication 

against one of multiple defendants. Accordingly, Defendants have not carried

their burden on appeal to show that Plaintiffs could not properly file, and the 

trial court could not properly grant, a motion for summary adjudication of the 

complaint’s second cause of action as to M&C only, and not as to all 

Defendants.

E

No triable issues of material fact. Defendants alternatively contend 

that the trial court erred by granting Plaintiffs’ motion for summary 

adjudication because there exist triable issues of material fact as to the 

second cause of action of Plaintiffs’ complaint and as to the second and fourth 

causes of action of Defendants’ amended cross-complaint. In particular, 

Defendants argue that there are triable issues on the factual question of 

whether M&C performed contracting services prior to May 22, 2014, the date 

on which it became licensed as a contractor in California.

Section 7026 defines a “contractor” as “any person who undertakes to or 

offers to undertake to, or purports to have the capacity to undertake to, or 

submits a bid to, or does himself or herself or by or through others, construct, 

alter, repair, add to, subtract from, improve, move, wreck or demolish any 

building . . . or other structure, . . . or to do any part thereof . . . .” (Italics 

added.) As discussed above, section 7031(a) provides: “[N]o person engaged 

in the business or acting in the capacity of a contractor, may bring or 

maintain any action, or recover in law or equity in any action, in any court of 
26

this state for the collection of compensation for the performance of any act or 

contract where a license is required by this chapter without alleging that [he 

or she was] a duly licensed contractor at all times during the performance of 

that act or contract . . . .” Section 7031(b) provides: “[A] person who utilizes 

the services of an unlicensed contractor may bring an action in any court of 

competent jurisdiction in this state to recover all compensation paid to the 

unlicensed contractor for performance of any act or contract.”

Section 7031(b) allows a plaintiff to recover “full reimbursement even if 

the contractor obtained a license after he or she began performing the work.” 

(MW Erectors, supra, 36 Cal.4th at p. 429, fn. 8; Alatriste, supra, 183 

Cal.App.4th at p. 671.) Importantly, “section 7031(b) provides a 

reimbursement right for all amounts paid to an unlicensed contractor if the 

contractor was unlicensed at any time during the performance . . . .” 

(Alatriste, at p. 669, italics added; see also Judicial Council of California v. 

Jacob Facilities, Inc. (2015) 239 Cal.App.4th 882, 896 (Judicial Council) [“[I]f 

a contractor is unlicensed for any period of time while delivering construction 

services, the contractor forfeits all compensation for the work, not merely 

compensation for the period when the contractor was unlicensed.”].) Section 

7031(b) does not permit an offset for work performed after a license is 

obtained. (Alatriste, at p. 672.) Unlicensed contractors are required to return 

all compensation received without reductions or offsets for the value of 

material or services provided. (White, supra, 178 Cal.App.4th at pp. 520-

521.) Therefore, if M&C performed any act requiring a contractor’s license 

prior to May 22, 2014, it is subject to the shield provisions of section 7031(a) 

and the sword provisions of section 7031(b).

Based on our review of the record, we conclude that there is undisputed 

evidence showing that M&C performed one or more acts that required a 
27

contractor’s license prior to May 22, 2014, when M&C obtained a California 

contractor’s license. In particular, before May 22, 2014, M&C performed 

contracting acts related to demolition or deconstruction of the existing home

on Plaintiffs’ property. In March 2014, M&C requested and received bids 

from subcontractors for the demolition or deconstruction of the existing home, 

garage and hardscape. In support of their motion for summary adjudication,

Plaintiffs submitted Elliott’s declaration, which attached copies of bids from 

demolition subcontractors. On March 20, 2014, J.T.H, Inc. submitted 

separate bids for demolition of the existing house and garage and for the 

breaking and removal of all concrete. On March 20, 2014, RRR submitted 

separate bids for deconstruction of the existing house and garage and for 

removal of the hardscape (e.g., driveway, foundations, sidewalks, and 

retaining walls). On March 26, 2014, RRR submitted an additional bid for 

removal of the hardscape. Defendants do not dispute the authenticity of 

those bids.

Plaintiffs also submitted a copy of an email dated March 30, 2014, from 

Patrick to Plaintiffs updating her on deconstruction of the existing home and 

stating that he had received a reply from RRR offering to reduce its price by 

$2,000 and that he had also asked Dirt Cheap Demolition to confirm that its 

bid included the perimeter walls in its pricing. Patrick stated: “It is likely 

we will sub-contract with [RRR]” and that he had asked to meet with Israel of 

RRR on the site the following Tuesday to review the work. Defendants do not 

dispute the authenticity of that email or its substance showing that in March 

2014 Patrick, on behalf of M&C, solicited bids from subcontractors for the 

demolition or deconstruction of the existing home and garage. Plaintiffs also 

submitted a copy of an email dated April 1, 2014, from Patrick to Lund in 

which he stated that he had “received a revised bid from Dirt Cheap Demo 
28

(increased by $5K) and a revised bid from [RRR] (reduced by $3K). The two 

bids are now within $4K with [RRR]’s work linking directly to the ReCon 

company. So I plan to subcontract Israel [of RRR] to move this forward.” 

(Italics added.) Defendants do not dispute the authenticity of that email or 

its substance showing that on or before April 1, 2014, Patrick, on behalf of 

M&C, solicited bids from subcontractors for the demolition or deconstruction 

of the existing home and garage and, in addition, intended to subcontract 

with RRR for that demolition or deconstruction work.

In support of its opposition to Plaintiffs’ motion, M&C submitted a 

request for judicial notice (which the trial court subsequently granted) of the 

application for a demolition permit signed by Patrick on May 7, 2014, 

identifying M&C as the permit holder and RRR as the demolition 

subcontractor. Plaintiffs submitted a copy of the demolition permit issued on 

May 9, 2014, by City to Patrick, as the permit holder, for demolition of the 

existing home and garage. M&C also submitted Patrick’s declaration, stating 

that on May 9, 2014, RRR “commenced deconstruction of the existing 

structure.” Importantly, Plaintiffs also submitted Elliott’s supplemental 

declaration that attached an excerpt from Patrick’s deposition in which 

Patrick stated: “I procured, managed, and paid for the deconstruction of the 

old house.” (Italics added.)

Based on the above undisputed evidence, it is clear that during the 

period from March 20, 2014, through May 9, 2014, M&C solicited bids from 

subcontractors, received bids from subcontractors, hired a subcontractor, and 

used a subcontractor to perform the acts of demolition or deconstruction of 

the existing home and garage, and that all of those acts by M&C occurred 

before May 22, 2014, when M&C received a contractor’s license. Contrary to 

Defendants’ assertion, the fact that RRR was listed on the demolition permit 
29

as the licensed contractor for performance of the demolition work does not

prove that M&C was not acting as a contractor when it solicited bids from 

and hired RRR as the subcontractor to perform that demolition work. Section 

7026 includes in its definition of a “contractor” any person “who undertakes 

to . . . or does himself or herself or by or through others, construct, alter, 

repair, add to, subtract from, improve, move, wreck or demolish any 

building . . . or other structure . . . or to do any part thereof . . . .” (Italics 

added.) Therefore, when a person or entity such as M&C hires a 

subcontractor, such as RRR, to perform the act of demolition or 

deconstruction of (i.e., “subtract from”) any building, that person or entity is 

acting as a contractor and must be licensed as a contractor to perform that 

act. (§§ 7026, 7031(a).) In Vallejo Development Co. v. Beck Development Co.

(1994) 24 Cal.App.4th 929, at page 941, the court stated: “[B]oth the person 

who provides construction services himself and one who does so ‘through 

others’ qualifies as a ‘contractor’ [under section 7026]. The California courts 

have also long held that those who enter into construction contracts must be 

licensed, even when they themselves do not do the actual work under the 

contract.” (Italics added.) Accordingly, there is no triable issue of material 

fact as to the question whether M&C performed contracting services by 

soliciting bids from subcontractors, and hiring and using a subcontractor, to 

perform demolition or deconstruction work on Plaintiffs’ property prior to 

May 22, 2014, when M&C obtained its contractor’s license.

In addition, there is undisputed evidence that prior to May 22, 2014, 

M&C performed contracting acts by submitting a construction invoice to 

Plaintiffs and accepting payment on that invoice. In support of their motion, 

Plaintiffs submitted an email dated May 2, 2014, from Patrick to Plaintiffs, 

attaching an invoice for “an on-account payment to cover the first 
30

subcontractors, deconstruction, shoring, and site set-up.” Plaintiffs 

submitted a copy of “Invoice No. 441F” from M&C to Plaintiffs, dated April 

30, 2014, and titled “Construction Invoice.” That construction invoice stated

that the amount of $50,000 was “[n]ow [d]ue” and was for site set-up costs, 

including a temporary construction fence, a temporary toilet, a shoring 

subcontract, and a deconstruction subcontract. Plaintiffs also submitted a 

copy of their check dated May 8, 2014, in the amount of $50,000 to M&C, 

which showed that it was paid by Plaintiffs’ bank on May 15, 2014.

In support of its opposition to Plaintiffs’ motion, M&C submitted 

Patrick’s declaration, which stated that the $50,000 construction invoice 

transmitted to Plaintiffs on May 2, 2014, was an “on-account payment [sic] 

for future construction site set up costs.” However, the construction invoice 

does not limit those site set-up costs to only those costs incurred on or after 

May 22, 2014, when M&C obtained its contractor’s license. Because 

Defendants do not dispute that demolition or deconstruction of the existing 

house and garage began on May 9, 2014, the only reasonable inference is that 

at least some portion of the demolition costs reflected on the April 30, 2014 

construction invoice was incurred by M&C before May 22, 2014.12 The 

evidence is therefore undisputed that on May 2, 2014, M&C sent an invoice to 

Plaintiffs for construction costs and Plaintiffs’ $50,000 check in payment of 

that invoice cleared Plaintiffs’ bank account on May 15, 2014. By carrying 

out such administrative duties as “soliciting and accepting payment” prior to 

12 Similarly, it could be inferred that the initial set-up costs for a 

temporary construction fence and a temporary toilet were also incurred by 

M&C on or before May 9, 2014, when that demolition or deconstruction 

began, which was before May 22, 2014, when M&C obtained its contractor’s 

license.
31

May 22, 2014, M&C engaged in the business of a contractor within the 

meaning of section 7026 before it obtained a contractor’s license. (Cf. 

Judicial Council, supra, 239 Cal.App.4th at p. 905.) Accordingly, there is no 

triable issue of material fact as to the issue of whether M&C performed 

contracting services by submitting a construction invoice to Plaintiffs and 

accepting payment on that invoice prior to May 22, 2014, when it obtained its 

contractor’s license.

Contrary to Defendants’ assertion, the fact that some of M&C’s services 

could alternatively be described as “design” services does not negate the fact

that M&C performed acts requiring a contractor’s license prior to May 22, 

2014. In Banis Restaurant Design, Inc. v. Serrano (2005) 134 Cal.App.4th 

1035 (Banis), the court addressed a construction contract entered into by an 

unlicensed contractor, which included compensation for certain design 

services to be provided by the unlicensed contractor, such as “drawings for 

electrical and plumbing plans [and] drawing plans for a reflected ceiling.” 

(Id. at pp. 1040-1042, 1044.) The court concluded that those services 

constituted acts of a contractor under section 7026 and therefore, that section 

7031(a) barred the unlicensed contractor’s action for compensation. (Banis, 

at pp. 1042-1043; see also WSS Industrial Construction, Inc. v. Great West 

Contractors, Inc. (2008) 162 Cal.App.4th 581, 592 [applying Banis to 

unlicensed contractor’s preparation of shop drawings].)

Based on the undisputed evidence that M&C performed acts requiring 

a contractor’s license prior to May 22, 2014, when it obtained its contractor’s 

license, the trial court correctly concluded that under section 7031(a) and 

section 7031(b) there were no triable issues of material fact regarding the 

second cause of action of Plaintiffs’ complaint and the second and fourth 

causes of action of Defendants’ amended cross-complaint, and that Plaintiffs 
32

were therefore entitled to summary adjudication on those causes of action. 

(§ 437c(f)(1); Aguilar, supra, 25 Cal.4th at pp. 843, 855; Dunn, supra, 135 

Cal.App.4th at p. 1290.) None of the evidence cited by Defendants, including 

the conclusory declarations of their two experts that M&C’s acts did not 

constitute acts requiring a contractor’s license, persuades us to reach a 

contrary conclusion. In particular, to the extent that M&C provided 

Plaintiffs with cost estimates and an estimated construction timetable before 

proceeding with their construction project, the undisputed evidence discussed 

above shows that M&C’s acts prior to May 22, 2014 were not restricted solely 

to providing such purported cost and timetable estimate services.13

II

Nonsuit on Defendants’ Architectural Services Cross-Claims

Defendants contend that the trial court erred by granting Plaintiffs’ 

motion for a judgment of nonsuit on Defendants’ cross-claims for 

compensation for architectural services provided by M&C and Patrick and by 

instructing the jury that Patrick was not a licensed architect when he 

performed services for Plaintiffs that required an architect’s license. In 

particular, Defendants argue that Patrick’s services in designing an allconcrete accessory building were exempt from California’s architectural 

licensing requirements.

13 Because we dispose of this issue based on our application of section 

7031(a) and section 7031(b) to the undisputed evidence of M&C’s contracting 

acts performed prior to May 22, 2014, as discussed above, we need not, and 

do not, address Plaintiffs’ alternative contention that those statutes also 

entitled them to summary adjudication because M&C’s contractor’s license 

was automatically suspended under section 7125.2 for failure to carry 

worker’s compensation insurance for its employees.
33

A

The first and third causes of action of Defendants’ amended crosscomplaint alleged cross-claims for breach of an oral design contract and 

quantum meruit for design services. At trial, Patrick testified that the house 

and garage for which he designed plans were timber-framed (i.e., woodframed), but the two-story annex or accessory building that he designed was 

made of “poured-in-place concrete.” On conclusion of the evidentiary portion 

of the jury trial, Plaintiffs moved for a judgment of nonsuit on Defendants’ 

first and third cross-claims. The court granted the motion, finding that the

exemptions provided in section 5537 do not apply to exempt the services 

provided by Patrick to Plaintiffs in designing the concrete accessory building

from California’s architectural licensing requirements. The court also 

instructed the jury:

“The Court has found that in performing design services for 

Plaintiffs’ home, Patrick McInerney was performing 

architectural services for which a license was required and 

that Mr. McInerney did not have such a license.”

After the jury returned its special verdict, the court, in a bifurcated trial, 

denied Plaintiffs’ first cause of action for restitution of architecture fees paid 

to Defendants.

B

An architect must be licensed by the State of California to perform 

architectural services in California. (§ 5500 et seq.; Hughes v. Board of 

Architectural Examiners (1998) 17 Cal.4th 763, 772-773.) An unlicensed 

person cannot recover consideration under a contract for, or the reasonable 

value of, any architectural services rendered. (§ 143, subd. (a); Force v. Hart

(1930) 209 Cal. 600, 605.) Section 5537 provides an exception from licensing 
34

requirements for architectural services performed relating to certain 

woodframe structures, stating:

“(a) This chapter does not prohibit any person from 

preparing plans, drawings, or specifications for any of the 

following:

“(1) Single-family dwellings of woodframe construction not 

more than two stories and basement in height.

“(2) Multiple dwellings containing no more than four 

dwelling units of woodframe construction not more than 

two stories and basement in height. . . .

“(3) Garages or other structures appurtenant to buildings

described under subdivision (a), of woodframe construction

not more than two stories and basement in height.

“(4) Agricultural and ranch buildings of woodframe 

construction . . . .

“(b) If any portion of any structure exempted by this section 

deviates from substantial compliance with conventional 

framing requirements for woodframe construction found in 

the most recent edition of Title 24 of the California Code of 

Regulations or tables of limitation for woodframe 

construction, as defined by the applicable building code 

duly adopted by the local jurisdiction or the state, the 

building official having jurisdiction shall require the 

preparation of plans, drawings, specifications, or 

calculations for that portion by, or under the responsible 

control of, a licensed architect or registered engineer. The 

documents for that portion shall bear the stamp and 

signature of the licensee who is responsible for their 

preparation. . . .” (Italics added.) 

C

Defendants assert that the trial court erred by granting Plaintiffs’ 

motion for a judgment of nonsuit on the first and third causes of action of 
35

Defendants’ amended cross-complaint because the exception in section 5537 

applied to allow Patrick and M&C, each of which was unlicensed as an 

architect in California, to design the construction plans for Plaintiffs’ 

property, including a wood-framed single family residence and a two-story

all-concrete accessory building, which were then certified by a licensed 

structural engineer. In particular, Defendants argue that section 5537, 

subdivision (b) applies to their design of the all-concrete accessory building.

As discussed above, in interpreting the meaning of a statute, we 

initially focus on the words of the statute because statutory language is 

generally the most reliable indicator of legislative intent. (Alatriste, supra, 

183 Cal.App.4th at p. 663.) The words of the statute should be given their 

ordinary and usual meaning and should be construed in their statutory 

context. (Ibid.; MW Erectors, supra, 36 Cal.4th at p. 426.) If the statutory 

language is unambiguous, we presume that the Legislature intended what it 

stated and the plain meaning of the statute governs. (MW Erectors, at 

p. 426.) On appeal, we independently review the legal question of the proper 

interpretation of a statute. (Alatriste, at p. 664.)

Based on our independent review of the plain language of section 5537, 

we conclude that statute does not provide any exemption from California’s 

architectural services licensing requirements for the design of an all-concrete 

accessory building. Section 5537, subdivision (a) provides exemptions from 

California’s architectural services license requirements for the preparation of 

plans for four specified types of wood-frame structures. There are two types 

of wood-framed structures designed by Patrick for Plaintiffs that presumably 

are covered by section 5537, subdivision (a)’s exemptions: (1) the single 

family residence (§ 5537, subd. (a)(1) [“[s]ingle-family dwellings of woodframe 

construction”]); and (2) the wood-framed garage (§ 5537, subd. (a)(3)
36

[“[g]arages or other structures appurtenant to buildings described under 

subdivision (a), of woodframe construction”]). However, the plain language of 

section 5537, subdivision (a) does not set forth any exemption for an allconcrete building.

Further, the plain language of section 5537, subdivision (b) does not

apply in this case to provide any exemption from California’s architectural 

services licensing requirements for Patrick’s design of Plaintiffs’ all-concrete 

accessory building. Section 5537, subdivision (b) applies only to the four 

specified structures exempted under section 5537, subdivision (a). 

Importantly, section 5537, subdivision (b) begins with the prefatory phrase: 

“If any portion of any structure exempted by this section [i.e., section 5537, 

subdivision (a)] deviates from substantial compliance with conventional 

framing requirements for woodframe construction . . . .” (Italics added.) By 

its plain language, section 5537, subdivision (b) applies only if there is any 

portion of a structure of woodframe construction exempted in section 5537, 

subdivision (a) that does not substantially comply with requirements for 

woodframe construction. Accordingly, section 5537, subdivision (b)’s 

provisions apply only if the structure in question is made in part of 

woodframe construction and in part of non-woodframe construction (e.g., 

concrete). Section 5537, subdivision (b) is thus plainly inapplicable to an allconcrete structure, such as the two-story all-concrete accessory building 

designed by Patrick in this case. Because Patrick and M&C were not 

licensed as architects in California and section 5537 did not apply to exempt 

their design of Plaintiffs’ all-concrete accessory building from licensing 

requirements, we conclude that the trial court correctly granted Plaintiffs’ 

motion for a judgment of nonsuit on the first and third causes of action of 
37

Defendants’ amended cross-complaint.14 Further, based on the reasoning 

above, we conclude that the court properly instructed the jury that Patrick 

performed architectural services for which a license was required and that he 

did not have such a license. Defendants do not cite any case or other 

authority persuading us to reach a contrary conclusion.15

III

Patrick’s Alter Ego Liability

Defendants contend that the trial court erred by finding that Patrick is 

liable for the judgment amount as an alter ego of M&C. In particular, 

Defendants argue that there is insufficient evidence to support the court’s 

14 Although the parties have not raised the issue on appeal, we presume 

that under section 143, subdivision (a), an unlicensed architect, like an 

unlicensed contractor under section 7031(b), generally cannot obtain 

compensation for services performed if any part of a project requires a 

license. (Cf. Banis, supra, 134 Cal.App.4th at pp. 1046-1047 [because work 

performed by unlicensed contractor that required license was part of 

integrated whole, § 7031(a) precluded recovery by unlicensed contractor for 

both part of work that required license and part of work that did not require 

license]; WSS Industrial Construction, Inc., supra, 162 Cal.App.4th at 

pp. 591-592 [same].) 

15 Assuming, for purposes of argument, that the trial court erred by 

granting Plaintiffs’ nonsuit motion and by instructing the jury as described 

above, we nevertheless would conclude that Defendants have not carried 

their burden on appeal to affirmatively show that those errors were 

prejudicial under the standard of review set forth in People v. Watson (1956) 

46 Cal.2d 818, 836 (i.e., that it is reasonably probable Defendants would have 

obtained a more favorable result if the errors had not occurred). (Pool v. City 

of Oakland (1986) 42 Cal.3d 1051, 1069; Cassim v. Allstate Ins. Co. (2004) 33 

Cal.4th 780, 800; Citizens for Open Government v. City of Lodi (2012) 205 

Cal.App.4th 296, 308-310.)
38

finding that if the acts of M&C were treated as those of the corporation alone, 

an inequitable result would follow.

A

The alter ego doctrine is an equitable doctrine, which one court 

described as follows: “A corporate identity may be disregarded--the ‘corporate 

veil’ pierced--where an abuse of the corporate privilege justifies holding the 

equitable ownership of a corporation liable for the actions of the corporation. 

[Citation.] Under the alter ego doctrine, then, when the corporate form is 

used to perpetuate a fraud, circumvent a statute, or accomplish some other 

wrongful or inequitable purpose, the courts will ignore the corporate entity 

and deem the corporation’s acts to be those of the persons or organizations 

actually controlling the corporation, in most instances the equitable owners. 

[Citations.]” (Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 

523, 538 (Sonora Diamond Corp.).)

“In California, two conditions must be met before the alter ego doctrine 

will be invoked. First, there must be such a unity of interest and ownership 

between the corporation and its equitable owner that the separate 

personalities of the corporation and the shareholder do not in reality exist. 

Second, there must be an inequitable result if the acts in question are treated 

as those of the corporation alone. [Citations.]” (Sonora Diamond Corp., 

supra, 83 Cal.App.4th at p. 538.) “Whether a party is liable under an alterego theory is normally a question of fact. [Citations.] ‘The conditions under 

which the corporate entity may be disregarded, or the corporation be 

regarded as the alter ego of the stockholders, necessarily vary according to 

the circumstances in each case inasmuch as the doctrine is essentially an 

equitable one and for that reason is particularly within the province of the 
39

trial court.’ [Citation.]” (Zoran Corp. v. Chen (2010) 185 Cal.App.4th 799, 

811 (Zoran).)

“The first requirement for disregarding the corporate entity under the 

alter ego doctrine--whether there is sufficient unity of interest and ownership 

that the separate personalities of the individual and the corporation no 

longer exist--encompasses a series of factors. Among the many factors to be 

considered in applying the doctrine are one individual’s ownership of all stock 

in a corporation; use of the same office or business location; commingling of 

funds and other assets of the individual and the corporation; an individual 

holding out that he is personally liable for the debts of the corporation; 

identical directors and officers; failure to maintain minutes or adequate 

corporate records; disregard of corporate [or legal] formalities; absence of 

corporate assets and inadequate capitalization; and the use of the corporation 

as a mere shell, instrumentality or conduit for the business of an individual. 

[Citation.] This list of factors is not exhaustive, and these enumerated 

factors may be considered with others under the particular circumstances of 

each case. ‘ “No single factor is determinative, and instead a court must 

examine all the circumstances to determine whether to apply the doctrine.” ’ 

[Citation.]” (Misik v. D’Arco (2011) 197 Cal.App.4th 1065, 1073 (Misik).)

“The second requirement for application of the alter ego doctrine is a 

finding that the facts are such that adherence to the fiction of the separate 

existence of the corporation would sanction a fraud or promote injustice. 

[Citation.] The test for this requirement is that if the acts are treated as 

those of the corporation alone, it will produce an unjust or inequitable result. 

[Citation.]” (Misik, supra, 197 Cal.App.4th at p. 1073, italics added.) 

“Application of the alter ego doctrine does not depend upon pleading or proof 

of fraud.” (Engineering Service Corp. v. Longridge Inv. Co. (1957) 153 
40

Cal.App.2d 404, 415 (Engineering Service Corp.).) “It is enough if the 

recognition of the two entities as separate would result in an injustice.” 

(Gordon v. Aztec Brewing Co. (1949) 33 Cal.2d 514, 523 (Gordon); see also 

Automotriz del Golfo de California S.A. de C.V. v. Resnick (1957) 47 Cal.2d 

792, 796 (Automotriz).)

On appeal, we apply the substantial evidence standard in reviewing a 

trial court’s finding that the alter ego doctrine applies. (Wolf Metals Inc. v. 

Rand Pacific Sales, Inc. (2016) 4 Cal.App.5th 698, 703 (Wolf Metals Inc.); Las 

Palmas Associates v. Las Palmas Center Associates (1991) 235 Cal.App.3d 

1220, 1248; Alexander v. Abbey of the Chimes (1980) 104 Cal.App.3d 39, 46-

47.) In applying the substantial evidence standard of review, we review the 

whole record in the light most favorable to the judgment to determine 

whether it discloses substantial evidence—that is, evidence that is 

reasonable, credible, and of solid value—to support the finding of fact. 

(People v. Rodriguez (1999) 20 Cal.4th 1, 11.) We do not reweigh the 

evidence, resolve conflicts in the evidence, or reevaluate the credibility of 

witnesses. (People v. Cochran (2002) 103 Cal.App.4th 8, 13.) The substantial 

evidence standard of review involves two steps. “First, one must resolve all 

explicit conflicts in the evidence in favor of the respondent and presume in 

favor of the judgment all reasonable inferences. [Citation.] Second, one must 

determine whether the evidence thus marshaled is substantial. While it is 

commonly stated that our ‘power’ begins and ends with a determination that 

there is substantial evidence [citation], this does not mean we must blindly 

seize any evidence in support of the respondent in order to affirm the 

judgment. . . . [Citation.] ‘[I]f the word “substantial” [is to mean] anything at 

all, it clearly implies that such evidence must be of ponderable legal 

significance. Obviously the word cannot be deemed synonymous with “any”
41

evidence. It must be reasonable . . . , credible, and of solid value . . . .’ 

[Citation.] The ultimate determination is whether a reasonable trier of fact 

could have found for the respondent based on the whole record.” (Kuhn v. 

Department of General Services (1994) 22 Cal.App.4th 1627, 1632-1633, fns. 

omitted.)

B

Before trial, Plaintiffs filed a trial brief, arguing that all Defendants 

were alter egos of each other and should therefore be found liable on the 

causes of action alleged against them. The parties agreed that the issue of 

alter ego liability would be tried by the court at a bifurcated hearing after the 

jury trial. After the jury returned its special verdict against M&C, the court 

heard Plaintiffs’ request to add Patrick, M&A, and McInerney Architects as 

judgment debtors, as alter egos of M&C. The court granted the request as to 

Patrick and denied it as to M&A and McInerney Architects. The court stated:

“The Court finds [Patrick] is in fact an alter ego of [M&C]. 

The Court notes it is not making that finding just because, 

as [Patrick] testified, he was the sole officer, director, 

shareholder and employee of [M&C]. [Patrick] also notes 

that [M&C] and [Patrick] shared a home office computer 

and CPA.

“It notes that moneys [sic] appear to have been diverted 

from [M&C] for [Patrick’s] individual use. Moneys [sic] 

were not kept separate. Corporate formalities were not 

honored. There was no evidence of adequate capitalization.

“Furthermore -- and this was not argued by the parties, but 

the Court considered the fact that [Patrick] testified that he 

kept separate calendars and diaries for the separate 

entities and work. No such diaries and calendars were ever 

produced. As a result, I am construing that evidence 

against the defendant.
42

“On the question of bad faith, the Court notes that all of the 

acts of [M&C], in particular, the act of acting as an 

architect, were taken individually by [Patrick]. The court 

finds that this is sufficient in this case to support alter ego. 

It rises to the level that it would be inequitable to allow the 

corporate formalities to prevent individual liability against 

[Patrick]. The Court finds further the responsible 

corporate officer doctrine supports this result.”

The court imposed alter ego liability on Patrick on all causes of action and 

included him as a judgment debtor in the initial judgment and the second 

amended judgment.

C

Defendants contend that there is insufficient evidence to support the 

trial court’s finding that Patrick was an alter ego of M&C and that he should 

therefore be held liable for the full amount of the judgment awarded against 

M&C. Based on our review of the record, we conclude that there is 

substantial evidence to support the court’s finding that both requirements for 

alter ego liability were satisfied.

On the first requirement, we conclude that there is substantial 

evidence that there was “such a unity of interest and ownership between the 

corporation and its equitable owner that the separate personalities of the 

corporation and the shareholder do not in reality exist.” (Sonora Diamond 

Corp., supra, 83 Cal.App.4th at p. 538.) As Patrick testified, and other 

evidence admitted at trial showed, Patrick was the sole shareholder, sole 

director, sole officer, and sole employee of M&C. M&C’s business office was 

located at Patrick’s home. Patrick and M&C shared the same accountant. 

Importantly, the evidence showed that Patrick commingled M&C’s funds 

with his personal funds and used M&C’s funds to pay his personal expenses. 
43

Plaintiffs presented the testimony of Jennifer Ziegler, a forensic accountant, 

who stated that about $500,000 in credit card charges were paid from M&C’s 

bank subaccount for Plaintiffs’ project for expenses that were not for 

Plaintiffs’ project. Also, Patrick testified that he used M&C’s funds (i.e., 

M&C’s bank subaccount for the Plaintiffs’ project) to pay his personal 

expenses (e.g., personal vacation expenses, car insurance payments, taxes, 

retirement deposits, housekeeper payments, home mortgage payments, 

etc.).16 Based on the above evidence showing that Patrick paid his personal 

expenses with M&C’s funds and other evidence showing that he

interchangeably used his own name (e.g., “Patrick McInerney, architect”) on 

emails and other documents in conducting M&C’s construction business, the 

court could reasonably infer that Patrick used M&C as a mere conduit for his 

construction business.

Further, the trial court could reasonably infer from the evidence that 

M&C did not maintain adequate capitalization for the nature and scope of its 

business and potential liabilities. In imposing alter ego liability on Patrick, 

the court found that there was no evidence of adequate capitalization for 

M&C. Although Patrick testified that he left certain funds (i.e., up to 

$113,000) that he had purportedly “earned” in M&C’s subaccount to 

capitalize that account in order to pay the potential costs of Plaintiffs’ project, 

the court could nevertheless reasonably infer that such fluctuating bank 

account funds did not prove that M&C had adequate capitalization for its 

construction business. Defendants do not cite to any M&C balance sheets or 

16 Although Patrick claimed that he maintained a diary that apparently 

tracked M&C’s funds that were used for his personal expenses, he did not 

present any such diary as evidence at trial to support that claim.
44

other evidence in the record showing the amounts of M&C’s capitalization, if 

any, from 2014 through December 2017 (when the court made its alter ego 

finding). The court could therefore reasonably infer that M&C had little, if 

any, capitalization by December 2017.17 Notably, as discussed in more detail 

below, Patrick suspended M&C’s business operations and, in effect,

abandoned M&C in late 2017, when he began using M&A instead of M&C for 

his construction business. Even assuming that M&C had capitalization of up 

to $113,000 from 2014 through December 2017, the court could reasonably 

infer that this amount of capitalization was inadequate when considering the 

nature and scope of M&C’s construction business, its potential liabilities, and 

the $2,732,627.87 amount awarded against M&C on Plaintiffs’ section 

7031(b) cause of action in this case. (Cf. Automotriz, supra, 47 Cal.2d at 

p. 798 [court “could have inferred that $5,000 was an insufficient capital 

investment in view of the volume of business conducted” by the corporation]; 

Claremont Press Pub. Co. v. Barksdale (1960) 187 Cal.App.2d 813, 815, 817 

[$500 in capitalization was irresponsible degree of undercapitalization when 

corporation owed $7,000 to creditor and collapsed the following year].)

The factors that the trial court could consider in making its alter ego 

finding included: Patrick’s ownership of all stock in M&C; his capacity as 

M&C’s sole director, officer, and employee; his use of the same office as 

M&C’s office; the commingling of his funds with M&C’s funds (e.g., by paying 

his personal expenses with M&C’s funds and charging M&C’s expenditures 

17 To the extent that Defendants argue that Patrick capitalized M&C by 

carrying commercial general liability insurance for M&C, they do not cite, 

and we are unaware of, any authority holding that liability insurance can 

constitute part of a corporation’s capitalization or otherwise substitute for the 

lack of adequate capitalization.
45

on his personal credit cards); the absence of adequate capitalization of M&C; 

disregard of corporate formalities; and Patrick’s use of M&C as a mere 

conduit for his construction business. (Misik, supra, 197 Cal.App.4th at 

p. 1073.) Based on our review of the record, there is substantial evidence to 

support the court’s finding that the above factors showed that there was such 

a unity of interest and ownership between M&C and Patrick that the 

separate personalities of M&C and Patrick did not in reality exist. (Sonora 

Diamond Corp., supra, 83 Cal.App.4th at p. 538.) There is thus substantial 

evidence from which the trial court could have found that the first 

requirement for Patrick’s alter ego liability was satisfied. To the extent that 

Defendants cite evidence and inferences therefrom that would have 

supported a contrary finding by the court, they misconstrue and/or misapply 

the substantial evidence standard of review.

On the second requirement, we conclude that there is substantial 

evidence to support the trial court’s finding that there would be an 

inequitable result if M&C’s acts in this case were treated as those of the 

corporation alone. (Sonora Diamond Corp., supra, 83 Cal.App.4th at p. 538.) 

As discussed above, under that second requirement, alter ego liability may be 

imposed if treating the acts as those of the corporation alone would produce 

an unjust or inequitable result. (Misik, supra, 197 Cal.App.4th at p. 1073.) 

“Application of the alter ego doctrine does not depend upon pleading or proof 

of fraud.” (Engineering Service Corp., supra, 153 Cal.App.2d at p. 415.) “It is 

enough if the recognition of the two entities as separate would result in an 

injustice.” (Gordon, supra, 33 Cal.2d at p. 523.) The California Supreme 

Court has recognized that a corporation’s inadequate capitalization may be 

sufficient to find that there would be an inequitable result if the corporate 

veil were not pierced and alter ego liability imposed, stating:
46

“ ‘If a corporation is organized and carries on business 

without substantial capital in such a way that the 

corporation is likely to have no sufficient assets available to 

meet its debts, it is inequitable that that shareholders 

should set up such a flimsy organization to escape personal 

liability. The attempt to do corporate business without 

providing any sufficient basis of financial responsibility to 

creditors is an abuse of the separate entity and will be 

ineffectual to exempt the shareholders from corporate 

debts. It is coming to be recognized as the policy of the law 

that shareholders should in good faith put at the risk of the 

business unincumbered [sic] capital reasonably adequate 

for its prospective liabilities. If the capital is illusory or 

trifling compared with the business to be done and the 

risks of loss, this is a ground for denying the separate 

entity privilege.’ ” (Automotriz, supra, 47 Cal.2d at p. 797,

quoting from Ballantine on Corporations (rev. ed. 1946), at 

pp. 302-303, italics added.)

The trial court found that there was no evidence that M&C was 

adequately capitalized for the nature and scope of its construction business 

and potential and actual liabilities, and, as discussed above, the record 

includes evidence showing that Patrick disregarded corporate formalities and 

that he used M&C, his wholly owned corporation, as a mere conduit to carry 

out his personal construction business. Based our review of the record, we 

conclude that there is substantial evidence to support the court’s finding that 

it would be inequitable to treat M&C’s acts in this case as those of M&C 

alone and thereby limit Plaintiffs’ ability to enforce their judgment to only 

the amount of assets that the inoperative corporation held at the time of the 

judgment. There is thus substantial evidence to support the trial court’s

finding that the second requirement for Patrick’s alter ego liability was 

satisfied (Sonora Diamond Corp., supra, 83 Cal.App.4th at p. 538), and that 

Patrick, as the alter ego of M&C, should be held jointly liable with M&C for 
47

the amount of the judgment in Plaintiffs’ favor.18 To the extent that 

Defendants cite evidence and inferences therefrom that would have 

supported a contrary finding by the court, they again misconstrue and/or 

misapply the substantial evidence standard of review.

Contrary to Defendants’ assertion, there is nothing in the jury’s special 

verdict that precluded the trial court from finding, in a bifurcated bench trial,

that Patrick was an alter ego of M&C and imposing on him joint liability for 

the amount of the judgment. As the trial court noted, the jury did not find 

Patrick liable on Plaintiffs’ causes of action for breach of contract, negligence, 

breach of fiduciary duty, and fraud. However, in making those findings, the 

jury did not address the question of whether Patrick should be held liable 

together with M&C as its alter ego. In particular, the jury was not asked to 

make findings on the two requirements for alter ego liability: (1) whether

there was such a unity of interest and ownership between M&C and Patrick

that the separate personalities of the corporation and the shareholder do not 

in reality exist; and (2) whether there would be an inequitable result if the 

acts in question were treated as those of M&C alone. (Sonora Diamond 

Corp., supra, 83 Cal.App.4th at p. 538.) Further, because alter ego liability is 

an equitable issue, that determination must be made by the trial court and 

not a jury. In this case, that determination was, in fact, made by the trial 

court per the parties’ stipulation to a bifurcated trial on that issue. (Dow 

18 Because we conclude that there is substantial evidence to support the 

trial court’s alter ego finding, we need not, and do not, address Plaintiffs’ 

alternative argument that the trial court also properly found Patrick jointly 

liable with M&C under the responsible officer doctrine. (See, e.g., People v. 

Roscoe (2008) 169 Cal.App.4th 829, 832, 839 [discussing elements for 

imposing liability on corporate officer under responsible officer doctrine].)
48

Jones Co. v. Avenel (1984) 151 Cal.App.3d 144, 147-148; Stark v. Coker (1942) 

20 Cal.2d 839, 846 (Stark); Zoran, supra, 185 Cal.App.4th at p. 811 

[determination of alter ego liability is equitable issue within province of trial 

court].) Accordingly, Defendants have not carried their burden on appeal to 

show that the jury’s special verdict precluded the trial court from finding that 

Patrick was an alter ego of M&C and imposing on Patrick liability for the 

judgment amount based thereon.

Also, contrary to Defendants’ assertion, neither fraud nor bad faith is 

required for a finding of alter ego liability. “Application of the alter ego 

doctrine does not depend upon pleading or proof of fraud.” (Engineering 

Service Corp., supra, 153 Cal.App.2d at p. 415.) “It is enough if the 

recognition of the two entities as separate would result in an injustice.” 

(Gordon, supra, 33 Cal.2d at p. 523.) It is correct, as Defendants note, that in 

1932, the California Supreme Court stated that to impose alter ego liability, 

it must be shown, among other things, that “the observance of the fiction of 

[the] separate existence would, under the circumstances, sanction a fraud or 

promote injustice. Bad faith in one form or another must be shown before the 

court may disregard the fiction of separate corporate existence.” (Hollywood 

Cleaning & Pressing Co. v. Hollywood Laundry Service (1932) 217 Cal. 124, 

129 (Hollywood).) However, in the almost 90-year period since that case, the 

California Supreme Court has not repeated or reaffirmed its statement in 

Hollywood that bad faith is required for alter ego liability and has instead 

consistently adopted and applied the less stringent requirement of an 

inequitable result, as discussed above. (See, e.g., Mesler v. Bragg Mgt. Co.

(1985) 39 Cal.3d 290, 300-301; Automotriz, supra, 47 Cal.2d at p. 796 [second 

requirement described as “if the acts are treated as those of the corporation 

alone, an inequitable result will follow”]; Gordon, at p. 523 [“It is not 
49

necessary that the plaintiff prove actual fraud. It is enough if the recognition 

of the two entities as separate would result in an injustice.”]; Stark, supra, 20 

Cal.2d at p. 846 [same]; Watson v. Commonwealth Ins. Co. (1936) 8 Cal.2d 61, 

68 [second requirement described as “adherence to the fiction of separate 

existence would, under the circumstances, promote fraud or injustice . . . . 

[I]t is sufficient that it appear that recognition of the acts as those of a 

corporation only will produce inequitable results.”].) It therefore appears 

that just four years after Hollywood was decided (i.e., in 1936 in Watson v. 

Commonwealth Ins. Co., at p. 68) the California Supreme Court abandoned 

any requirement of a finding of fraud or bad faith in order to impose alter ego 

liability and has consistently held since that time that the second 

requirement is satisfied when a court finds that if the acts are treated as 

those of the corporation alone, an inequitable result will follow. As we 

concluded above, there is substantial evidence to support the trial court’s 

finding in this case that the second requirement for Patrick’s alter ego 

liability was satisfied.19

19 Further, if the second requirement for alter ego liability were 

interpreted more broadly than current case law provides so as to include 

consideration of the equities of section 7031(b) reimbursement liability, it is 

possible that the trial court could have reached a contrary finding and/or we 

might have concluded that this requirement was not satisfied. As 

Defendants suggest, there appears on its face to be an inequity in allowing 

Plaintiffs to retain the fruits of M&C’s labor and materials (i.e., the 

apparently defect free La Jolla residence valued at $2.7 million) while also 

awarding Plaintiffs a judgment for reimbursement of all amounts they paid 

to M&C for construction of that residence. The result in this case is 

unquestionably harsh. However, given the statutory language of, and 

current case law pertaining to, section 7031(b) as discussed above, we are 

constrained from considering those underlying equities in determining 

whether there is substantial evidence to support the trial court’s finding that 

the second requirement for alter ego liability is satisfied. To absolve Patrick 
50

Further, contrary to Defendants’ assertion, the trial court did not err by 

denying their request for a written statement of decision on its finding of 

alter ego liability. As Defendants concede, the trial court conducted its 

bifurcated trial on the alter ego issue on December 20, 2017, and in an oral 

ruling the court explained its reasons for finding that Patrick was liable for 

the judgment as M&C’s alter ego. Because that trial took less than one day, 

Defendants were not entitled to a written statement of decision under Code of 

Civil Procedure section 632.20 Contrary to Defendants’ assertion, the fact 

that the trial court may have relied, in part, on evidence that was admitted 

during the jury trial on the other issues in ruling on the alter ego issue, did 

not convert the alter ego bifurcated trial into a three-week trial, which would 

have required, upon request, a written statement of decision. Defendants do 

not cite, nor are we aware of, any case so holding. Because Defendants have 

not carried their burden on appeal to affirmatively show that they were 

of alter ego liability based on a perceived inequitable result would be contrary 

to, and in fact would negate, the remedy that the Legislature intended by 

enacting section 7031(b). 

20 Code of Civil Procedure section 632 provides: “In superior courts, upon 

the trial of a question of fact by the court, written findings of fact and 

conclusions of law shall not be required. The court shall issue a statement of 

decision explaining the factual and legal basis for its decision as to each of 

the principal controverted issues at trial upon the request of any party 

appearing at the trial. The request must be made within 10 days after the 

court announces a tentative decision unless the trial is concluded within one 

calendar day or in less than eight hours over more than one day in which 

event the request must be made prior to the submission of the matter for 

decision. . . . [¶] The statement of decision shall be in writing, unless the 

parties appearing at trial agree otherwise; however, when the trial is 

concluded within one calendar day or in less than 8 hours over more than one 

day, the statement of decision may be made orally on the record in the 

presence of the parties.” (Italics added.)
51

entitled to a statement of decision, we conclude that the court did not err by 

denying Defendants’ request for a written statement of decision on its alter 

ego finding. In any event, Defendants have not carried their burden on 

appeal to affirmatively show that the court’s purported error was prejudicial 

to them (i.e., that there was a miscarriage of justice or that they would have 

obtained a more favorable result if the court had issued a written statement 

of decision). (F.P. v. Monier (2017) 3 Cal.5th 1099, 1108.)

IV

Addition of M&A as a Judgment Debtor

Defendants contend that the trial court erred by granting Plaintiffs’ 

request to add M&A as a judgment debtor as a successor corporation to M&C

and amending the judgment accordingly.

A

After the initial judgment was entered in January 2018, Plaintiffs filed 

a motion to add M&A as a judgment debtor, arguing that M&A was a 

successor corporation to M&C. Plaintiffs argued that after the trial in this 

case, Patrick allowed M&C to be suspended as a California corporation,

ceased conducting his construction business through M&C, and instead 

began using M&A to conduct his construction business. They argued that, as 

M&C’s successor corporation, M&A should be added as a judgment debtor 

together with M&C and Patrick. Plaintiffs submitted evidence showing that 

at about the time of the January 2018 judgment, Patrick switched his 

business from M&C to M&A and began operating his construction business 

through M&A. Defendants opposed the motion, arguing that it would be 

inappropriate in the circumstances of this case to find that M&A was an alter 
52

ego of M&C. However, Defendants did not dispute Plaintiffs’ assertion that 

M&A was a successor corporation to M&C.

At the hearing on Plaintiffs’ motion, citing McClellan v. Northridge 

Park Townhome Owners Assn., Inc. (2001) 89 Cal.App.4th 746 (McClellan), 

the trial court granted the motion to add M&A as a judgment debtor on the 

ground that M&A was a successor corporation to M&C. In its minute order, 

the court stated:

“Corporations ‘cannot escape liability by a mere change of 

name or a shift of assets when and where it is shown that 

the new corporation is, in reality, but a continuation of the 

old,’ especially when the rights of creditors are involved. 

[Citations.] As noted, the Court previously found that 

M&C was [Patrick’s] alter ego. M&C has not done any 

work since it completed its last project in 2017. [Citation.] 

M&C then became ‘dormant’ and [Patrick] began working 

for M&A. [Citation.] [Patrick] is the sole owner and 

employee of M&A. [Citation.] M&A was not doing any 

business as of August 2017. [Citation.] At his debtor’s 

exam, [Patrick] said he switched companies because M&A 

primarily deals with design. [Citation.] However, during 

his deposition [Patrick] said he created M&A to service his 

foreign clients and M&C for local clients. [Citation.] 

[Patrick] also conceded that M&C also did design work. 

[Citation.] M&A’s 2017 Statement of Information says the 

company is in the ‘construction’ business. [Citation.] 

[Patrick] said he receives a salary from M&A but was 

unable to recall how the salary is determined. [Citation.] 

In 2018, M&A paid for some of the McInerney family’s 

personal expenses such as a personal trainer and 

housekeeper. [Citation.] [Patrick] similarly used M&C to 

pay personal expenses. Based on the foregoing, [P]laintiffs 

have proven that M&A is merely a continuation of M&C. It 

appears that [Patrick] has sought to frustrate [P]laintiffs’ 

ability to collect on the judgment by essentially changing 

the name of his business while carrying on the same 

business as before. Under these circumstances, it is 
53

appropriate to hold M&A liable as a judgment debtor. 

Accordingly, the motion to add M&A as a judgment debtor 

is granted.”

On January 25, 2019, the trial court entered a second amended 

judgment adding M&A as a judgment debtor together with M&C and Patrick 

for a total judgment amount of $2,940,325.50, which included an award of 

Plaintiffs’ attorney fees and costs.

B

Under Code of Civil Procedure section 187, the “trial court has 

jurisdiction to modify a judgment to add additional judgment debtors.” 

(McClellan, supra, 89 Cal.App.4th at p. 752.) As an alternative to alter ego 

liability, modification of a judgment to add a judgment debtor may also be 

proper under the successor corporation theory. (Wolf Metals Inc., supra, 4 

Cal.App.5th at p. 704.) “According to that theory, when a corporation sells or 

transfers all of its assets to another corporation constituting its ‘ “mere 

continuation,” ’ the latter is also liable for the former’s debts and liabilities. 

[Citations.]” (Id. at pp. 704-705.) “ ‘California decisions holding that a 

corporation acquiring the assets of another corporation is the latter’s mere 

continuation and therefore liable for its debts have imposed such liability 

only upon a showing of one or both of the following factual elements: (1) no 

adequate consideration was given for the predecessor corporation’s assets and 

made available for meeting the claims of its unsecured creditors; (2) one or 

more persons were officers, directors, or stockholders of both corporations. 

[Citations.]’ ” (McClellan, at p. 754, fn. 4, quoting Ray v. Alad Corp. (1977) 19 

Cal.3d 22, 29.) Alternatively stated, “ ‘corporations cannot escape liability by 

a mere change of name or a shift of assets when and where it is shown that 

the new corporation is, in reality, but a continuation of the old. Especially is 
54

this well settled when actual fraud or the rights of creditors are involved, 

under which circumstances the courts uniformly hold the new corporation 

liable for the debts of the former corporation.’ ” (Cleveland v. Johnson (2012) 

209 Cal.App.4th 1315, 1327 (Cleveland), quoting Blank v. Olcovich Shoe 

Corp. (1937) 20 Cal.App.2d 456, 461 (Blank).)

The application of the successor corporation theory is an equitable issue 

to be decided based on the unique facts of a case. (Cleveland, supra, 209 

Cal.App.4th at p. 1330.) Accordingly, on appeal, we apply the substantial 

evidence standard in reviewing a trial court’s determination to apply the 

successor corporation theory to add a successor corporation as a judgment 

debtor. (Wolf Metals Inc., supra, 4 Cal.App.5th at p. 703; McClellan, supra, 

89 Cal.App.4th at pp. 751-752.)

C

Based on our review of the record, we conclude that there is substantial 

evidence to support the trial court’s finding that M&A is a successor 

corporation to M&C and therefore, should be added as a judgment debtor. 

The evidence showed that Patrick was the sole shareholder, sole director, sole 

officer, and sole employee of both M&C and M&A. Patrick incorporated M&C 

in 2011 and M&A in July 2014. M&C’s statement of information for 2016 

stated that it was in the business of construction, while its statement of 

information for 2017 stated that it was in the business of architecture. 

M&A’s statements of information for 2016 and 2017 stated that it was in the 

business of construction. Patrick testified that he did not know why he had 

two corporations that engaged in construction in California. Patrick testified 

that M&C and M&A share the same office, the same computers, and the 

same accountant. He testified that he maintained a diary in which he 
55

recorded his time worked for each of M&C and M&A, but was unable to find 

that diary.

At his judgment debtor’s examination in July 2018, Patrick testified 

that he did not recall receiving any compensation from M&A prior to January 

2, 2018. After Patrick ceased working for M&C in late 2017, M&C became 

dormant. He could not recall working on any projects for M&A prior to 2018. 

Patrick testified that M&C was initially a design company and became a 

design and construction company because of Plaintiffs’ project, while M&A 

focused only on design. He testified that he received a salary from M&A, but 

could not recall how that salary was determined. Patrick’s attorney 

instructed him not to answer questions regarding M&A, such as balances in 

its bank accounts, its gross revenues, and the projects it worked on.

The above evidence supports findings by the trial court that one person 

(i.e., Patrick) was the shareholder, director, and officer of both M&C and 

M&A, thereby satisfying one of the two factors, and thus the minimum 

required, for application of the successor corporation doctrine to add M&A as 

a judgment debtor. (McClellan, supra, 89 Cal.App.4th at p. 754, fn. 4; Ray v. 

Alad Corp., supra, 19 Cal.3d at p. 29.) In addition, based on the evidence 

showing that Patrick ceased working for and, in effect, abandoned M&C and 

then immediately began to conduct his business through M&A, the court 

could reasonably infer that Patrick transferred his construction and design 

business from M&C to M&A in late 2017 or early 2018 and that there was no

evidence showing that M&A paid M&C any consideration for the transfer of 

M&C’s business and other assets (e.g., business goodwill). Based on this 

evidence, the court could reasonably infer that no adequate consideration was 

given by M&A for M&C’s assets, which could have been made available for 

meeting the claims of unsecured creditors (e.g., Plaintiffs), thereby satisfying 
56

the other (and non-essential) factor for application of the successor 

corporation doctrine. (McClellan, at p. 754, fn. 4; Ray v. Alad Corp., at p. 29.) 

Even in the absence of an actual transfer of assets from M&C to M&A, the 

court could reasonably infer that Patrick switched his design and 

construction business from M&C to M&A to hinder Plaintiffs’ recovery of the 

judgment against M&C (cf. McClellan, at pp. 750, 755-756), and thus, that 

“in reality” M&A was a mere continuation of the business of M&C. 

(Cleveland, supra, 209 Cal.App.4th at p. 1327; Blank, supra, 20 Cal.App.2d at 

p. 461.) We therefore conclude that there is substantial evidence to support 

the court’s finding that the successor corporation doctrine applied and that 

M&A should be added as a judgment debtor. (Wolf Metals Inc., supra, 4 

Cal.App.5th at p. 703; McClellan, at pp. 751-752.) To the extent that 

Defendants cite evidence or inferences therefrom that would have supported 

a contrary finding by the trial court, they again misconstrue and/or misapply 

the substantial evidence standard of review. (Wolf Metals Inc., at p. 703; 

McClellan, at pp. 751-752.) Accordingly, Defendants have not carried their 

burden on appeal to affirmatively show that the trial court erred by granting 

Plaintiffs’ motion to add M&A as a judgment debtor and entering the second 

amended judgment adding M&A as a judgment debtor.21

21 In particular, we are not persuaded by Defendants’ conclusory 

assertion that application of the successor corporation doctrine in this case 

would violate the constitutional prohibition against involuntary servitude. 

(U.S. Const., 13th Amend., § 1 [“Neither slavery nor involuntary 

servitude . . . shall exist within the United States . . . .”].) Defendants do not 

cite, and we are not aware of, any case holding that the 13th Amendment 

applies to preclude the application of the successor corporation doctrine to 

cases involving two corporations with the same sole shareholder and sole 

employee.
57

V

Award of Attorney Fees under Section 1029.8

Defendants contend that the trial court erred by awarding Plaintiffs 

attorney fees under section 1029.8 in the amount of $155,008.50 for 

prevailing on Plaintiffs’ section 7031(b) cause of action.

A

Originally enacted in 1985, section 1029.8 currently provides:

“(a) Any unlicensed person who causes injury or damage to 

another person as a result of providing goods or performing 

services for which a license is required under . . . Division 3 

(commencing with Section 5000) . . . of the Business and 

Professions Code . . . shall be liable to the injured person 

for treble the amount of damages assessed in a civil action 

in any court having proper jurisdiction. The court may, in 

its discretion, award all costs and attorney’s fees to the 

injured person if that person prevails in the action. 

[¶] . . . [¶]

“(d) For the purposes of this section, the term ‘unlicensed 

person’ shall not apply to any of the following: [¶] (1) Any 

person, partnership, corporation, or other entity providing 

goods or services under the good faith belief that they are 

properly licensed and acting within the proper scope of that 

licensure. . . .” (Stats. 1985, ch. 895, § 1; amended by Stats. 

2004, ch. 575, § 1.)

As discussed above, in interpreting a statute, “our fundamental 

objective is to ascertain the legislative intent.” (Alatriste, supra, 183 

Cal.App.4th at p. 663.) We initially focus on the words of the statute because 

statutory language is generally the most reliable indicator of legislative 

intent. (Ibid.) The words of the statute should be given their ordinary and 

usual meaning and should be construed in their statutory context. (Ibid.; 
58

MW Erectors, supra, 36 Cal.4th at p. 426.) If the statutory language is 

unambiguous, we presume the Legislature intended what it stated and the 

plain meaning of the statute governs. (MW Erectors, at p. 426.) On appeal, 

we independently review the legal question of the proper interpretation of a 

statute. (Alatriste, at p. 664; Kirby v. Immoos Fire Protection, Inc. (2012) 53 

Cal.4th 1244, 1250 [independent, or de novo, review of questions of statutory 

construction].) Accordingly, we review, de novo, the trial court’s 

interpretation of section 1029.8 in this case. (Rony v. Costa (2012) 210 

Cal.App.4th 746, 756 [de novo review of interpretation of § 1029.8].)

B

As noted above, Plaintiffs elected the remedy of reimbursement under 

their section 7031(b) cause of action in lieu of the damages awarded by the 

jury for their cause of action for breach of the construction contract. After the 

trial court entered its initial judgment in favor of Plaintiffs, Plaintiffs filed a 

motion for an award of attorney fees requesting that the court award fees 

pursuant to section 1029.8. Defendants opposed the motion, arguing that 

section 1029.8 was inapplicable to Plaintiffs’ award of reimbursement 

pursuant to section 7031(b) because Plaintiffs were not an “injured” party 

under that statute. In reply, Plaintiffs argued that section 1029.8 could 

apply to their section 7031(b) reimbursement award because they were 

“injured” by M&C’s actions. 

On August 3, 2018, the trial court issued an order granting Plaintiffs’ 

motion for attorney fees under section 1029.8, stating:

“Defendants argue that [P]laintiffs do not qualify as an 

‘injured party’ because [P]laintiffs elected the remedy of 

disgorgement under . . . section 7031 which does not 

require a showing of injury or damage. Defendants’ 
59

argument fails to acknowledge that section 1029.8 

specifically incorporates Division 3 of the Business and 

Professions Code, which includes . . . section 7031. Thus, 

section 1029.8 contemplates that fees may be awarded in 

cases where an unlicensed contractor is required to forfeit 

their compensation. Moreover, section 1029.8 does not 

‘affect or limit any other remedy, including, but not limited 

to, a claim for exemplary damages.’ [Citation.] Thus, the 

fact that [P]laintiffs elected a statutory remedy does not 

preclude them from seeking fees.”

Accordingly, the court awarded Plaintiffs attorney fees in the amount of 

$155,008.50 that they incurred in prevailing on their motion for summary 

adjudication of their section 7031(b) cause of action.

C

In challenging the attorney fee award, Defendants assert that the trial 

court erred in interpreting section 1029.8 in a manner that would allow an 

award of attorney fees to a party that prevails on a cause of action for section 

7031(b) reimbursement. Defendants argue that the plain language of section 

1029.8 requires that an unlicensed person “cause[] injury or damage” to 

another person (i.e., the “injured person”) as a result of providing goods or 

performing services for which a license is required and provides that the 

court may award attorney fees “to the injured person”. (§ 1029.8.) Because 

Plaintiffs elected the section 7031(b) remedy of reimbursement, which is not 

based on injury or damage, Defendants argue that Plaintiffs are not injured 

persons within the meaning of section 1029.8 and the court therefore erred by 

awarding Plaintiffs attorney fees.

As Defendants note, a section 7031(b) reimbursement award is, in 

effect, a statutory penalty imposed on an unlicensed contractor based on 

public policy and not on the equities of a particular case or any injury
60

suffered by a customer of an unlicensed contractor. (MW Erectors, supra, 36 

Cal.4th at pp. 418, 423, 425; Hydrotech Systems, Ltd. v. Oasis Waterpark

(1991) 52 Cal.3d 988, 995, 997 (Hydrotech).) The California Supreme Court 

stated that the CSLL “imposes strict and harsh penalties for a contractor’s 

failure to maintain proper licensure.” (MW Erectors, at p. 418, italics added.) 

Those penalties apply “regardless of the merits of” an action. (Ibid.) In 

enacting section 7031(a), the Legislature intended “to impose a stiff all-ornothing penalty for unlicensed work.” (Id. at p. 426.) We infer that the 

Legislature had the same intent in enacting section 7031(b) in 2001. “By 

adding this [section 7031(b)] remedy, the Legislature sought to further 

section 7031(a)’s policy of deterring violations of licensing requirements by 

‘allow[ing] persons who utilize unlicensed contractors to recover 

compensation paid to the contractor for performing unlicensed work. 

[Citation.]’ [Citation.]” (Alatriste, supra, 183 Cal.App.4th at p. 666.) “[T]he 

Legislature intended that courts interpret section[s] 7031(a) and [7031](b) in 

a consistent manner, resulting in the same remedy regardless of whether the 

unlicensed contractor is the plaintiff or defendant.” (Ibid.) Alternatively 

stated, “the Legislature enacted section 7031(b) to ensure the same penalties

apply for an unlicensed contractor regardless whether the contractor was the 

plaintiff or the defendant.” (Id. at p. 667, italics added.) Accordingly, to 

establish a section 7031(b) reimbursement cause of action, a plaintiff need 

not prove that the unlicensed contractor/defendant caused the plaintiff an 

injury by reason of negligent or deficient services, defective materials, or 

other injurious acts, but need simply show that the unlicensed 

contractor/defendant was paid for services or materials for which a 

contractor’s license was required. (Miller v. Municipal Court of Los Angeles

(1943) 22 Cal.2d 818, 837 [“The test generally underlying most of the cases 
61

. . . is that a ‘penalty’ includes any law compelling a defendant to pay a 

plaintiff other than what is necessary to compensate him for a legal damage 

done him by the former.”].) Therefore, a section 7031(b) reimbursement 

cause of action can be successful even where, as in this case, the unlicensed 

contractor’s services and materials met prevailing construction standards 

and, as a result, the plaintiff did not suffer any actual injury or damage from 

those services and materials. (Cf. Siry Investment, L.P. v. Farkhondehpour

(2020) 45 Cal.App.5th 1098, 1141 [no attorney fee award allowed under 

§ 1029.8 because plaintiff did not allege contractor’s unlicensed status caused 

its injury].)

Independently construing the language of section 1029.8, we conclude 

that its plain language allows an award of attorney fees only when an 

unlicensed person “causes injury or damage” to another person (i.e., the 

“injured person”) as a result of providing goods or performing services for 

which a license is required. (§ 1029.8.) Next, independently construing the 

language of section 7031(b), we conclude that its plain language requires, as 

a statutory penalty, reimbursement of all compensation paid to an unlicensed 

contractor for all services performed and all materials provided for which a 

contractor’s license is required. (§ 7031(b); see also MW Erectors, supra, 36 

Cal.4th at pp. 418, 423, 425; Hydrotech, supra, 52 Cal.3d at pp. 995, 997; 

Alatriste, supra, 183 Cal.App.4th at p. 667.) A section 7031(b) 

reimbursement award is a statutory penalty that applies regardless of 

whether the plaintiff has suffered any legal injury or damage as a result of 

services or goods provided by an unlicensed contractor within the meaning of 

section 1029.8.

The trial court’s order granting Plaintiffs’ motion for summary 

adjudication on their second cause of action under section 7031(b) made no 
62

finding regarding any legal injury or damage suffered by Plaintiffs caused by 

M&C’s unlicensed status. Rather, the amount of the section 7031(b) 

reimbursement award was based solely on the total amount of compensation 

paid by Plaintiffs to M&C. The judgment awarding Plaintiffs reimbursement 

for the amounts paid to M&C was therefore a statutory penalty under section 

7031(b) that was imposed without any nexus or connection to any legal injury 

or damage suffered by Plaintiffs. (MW Erectors, supra, 36 Cal.4th at pp. 418, 

423, 425; Hydrotech, supra, 52 Cal.3d at pp. 995, 997; Alatriste, supra, 183 

Cal.App.4th at p. 667.) Because the jury did not find that Plaintiffs suffered

any legal injury or damage caused by M&C’s unlicensed status, section 

1029.8’s plain language does not apply to allow an award of attorney fees. 

Accordingly, we conclude that the trial court erred by awarding Plaintiffs 

attorney fees of $155,008.50 pursuant to section 1029.8.22

Plaintiffs assert, and the trial court found, that section 1029.8 applied 

to a section 7031(b) reimbursement award because section 1029.8, 

subdivision (a) lists Division 3 of the Business and Professions Code, which

includes section 7031(b) and other contractor licensing provisions (i.e., § 7000 

et seq.), within the types of licenses covered by section 1029.8. Initially, we 

agree that it is a prerequisite to a section 1029.8 attorney fee award that the 

defendant be an unlicensed contractor. Specifically, section 1029.8(a) lists 

those types of licenses for which an attorney fee award may be imposed 

against an unlicensed person for provision of services that require a license. 

22 Because we dispose of this issue based on section 1029.8’s plain 

language, we need not, and do not, address Defendants’ alternative assertion 

that no section 1029.8 attorney fee award was appropriate because M&C 

acted “under a good faith belief” that it was properly licensed within the 

meaning of section 1029.8, subdivision (d).
63

However, contrary to Plaintiffs’ and the trial court’s apparent understanding, 

that unlicensed status is insufficient, by itself, to support an attorney fee 

award under section 1029.8; there must also be a finding that the unlicensed 

person caused a legal injury or damage to the plaintiff as a result of providing 

goods or performing services for which a license is required. (§ 1029.8, subd. 

(a).) Because, as discussed above, Plaintiffs’ section 7031(b) reimbursement 

award was not based on any legal injury or damage that they suffered, 

Plaintiffs are not entitled to an award of their attorney fees under section 

1029.8.

PLAINTIFFS’ CROSS-APPEAL

VI

Section 3287(a) Prejudgment Interest

In their cross-appeal, Plaintiffs contend that the trial court erred by 

denying their request for prejudgment interest under section 3287(a). 

Plaintiffs assert that because they timely and sufficiently requested an award 

of prejudgment interest under section 3287(a), they are entitled to an award 

of prejudgment interest under that statute as a matter of law.

A

Section 3287(a) provides: 

“A person who is entitled to recover damages certain, or 

capable of being made certain by calculation, and the right 

to recover which is vested in the person upon a particular 

day, is entitled also to recover interest thereon from that 

day . . . .”

One purpose of section 3287(a) prejudgment interest is to provide 

compensation to the plaintiff for the loss of use of the award during the 
64

prejudgment period. (Lakin v. Watkins Associated Industries (1993) 6 Cal.4th 

644, 663.) Under section 3287(a), “the court has no discretion, but must 

award prejudgment interest upon request . . . .” (North Oakland Medical 

Clinic v. Rogers (1998) 65 Cal.App.4th 824, 828 (North Oakland).) 

“[T]here is no authority mandating any particular procedure for 

securing an award of prejudgment interest.” (North Oakland, supra, 65 

Cal.App.4th at p. 829.) “[N]o statute or rule of court establishes a procedure 

for requesting an award of prejudgment interest, or a time limit therefor, in 

the superior court.” (Id. at pp. 829-830.) Nevertheless, a party must make a 

reasonably timely request for prejudgment interest. “[P]rejudgment interest 

is not a cost, but an element of damages,” and therefore “prejudgment 

interest should be awarded in the judgment on the basis of a specific request 

therefor made before entry of judgment.” (Id. at p. 830.) “A general prayer in 

the complaint is adequate to support an award of prejudgment interest.” (Id. 

at p. 829.) Regarding the timeliness of a request, “at the latest, a request for 

prejudgment interest under section 3287 may be sought as part of a motion 

for new trial pursuant to Code of Civil Procedure section 657 . . . .” (North 

Oakland, at p. 830.) In the absence of a statute or a rule of court setting 

forth procedural requirements for a request for prejudgment interest, the 

court in North Oakland concluded that “requests for prejudgment interest 

under section 3287 by a successful plaintiff must be made by way of motion 

prior to entry of judgment, or the request must be made in the form of a 

motion for new trial no later than the time allowed for filing such a motion. 

(Code Civ. Proc., § 659.)” (North Oakland, at p. 831.)

However, at least one other court has held, instead, that a formal 

motion is not a prerequisite for an award of section 3287 prejudgment 

interest. In Watson Bowman Acme Corp. v. RGW Construction, Inc. (2016) 2 
65

Cal.App.5th 279 (Watson), the court stated: “[T]he fact that Watson’s request 

[for prejudgment interest] was not labeled as [a] motion for new trial or as a 

motion for modification under Code of Civil Procedure section 657 does not 

render its format defective. [Citations.]”23 (Watson, at p. 299.) Rather, a 

request for prejudgment interest is sufficient if it “provides the relevant 

information to the opposing party and the court and gives the adverse party a 

reasonable opportunity to oppose the request on its merits. [Citations.]” 

(Ibid.) In the circumstances of Watson, the court concluded that “Watson’s 

request clearly identified (1) the relief requested (i.e., the addition of 

prejudgment interest to the amount of the judgment) and (2) the grounds 

upon which the request was based--specifically, [section 3287(a)] and its 

contention that the damages were a liquidated sum. Furthermore, Watson 

provided RGW a sufficient opportunity to oppose the request, as is evident

from the written opposition filed by RGW with the court. Consequently, we 

conclude Watson’s request provided RGW with the [sic] sufficient notice and a 

reasonable opportunity for opposition, thus satisfying the purpose and 

requirements of Code of Civil Procedure section 659, subdivision (a).” 

(Watson, at p. 299, italics added.) Accordingly, the court concluded that “the 

format of Watson’s request for prejudgment interest was not defective.” (Id. 

at p. 300.)

23 Watson further clarified that “[a] request for prejudgment interest is 

not a request for a new trial . . . , but a request to modify the decision to 

include an award of prejudgment interest.” (Watson, supra, 2 Cal.App.5th at 

p. 298, fn. 14.)
66

B

In their complaint, Plaintiffs alleged that they had made 10 payments 

to Defendants, which totaled $2,732,627.87, and they specified the amounts 

of each of those 10 payments. In their second cause of action for section 

7031(b) reimbursement (or disgorgement), Plaintiffs sought reimbursement 

of all amounts paid to Defendants, “which amount is at least $2,732,627.87, 

plus interest.” (Italics added.) In their prayer for relief, Plaintiffs included 

the following request: “7. For prejudgment interest according to law.” 

(Italics added.)

On January 22, 2018 (after the jury had returned its special verdict), 

Plaintiffs served Defendants with their proposed judgment, which included a 

provision stating: “On the Second Cause of Action for Disgorgement of 

Contractor’s Fees, the sum of $2,732,627.87, plus prejudgment interest at the 

rate of 10% per annum to the date hereof in the amount of $___________.” In 

submitting that proposed judgment, Christopher Elliott, Plaintiffs’ counsel, 

stated in an accompanying letter:

“For the Court’s ease in calculating prejudgment interest, 

prejudgment interest from the dates of the payments to be 

disgorged to the date of this filing [i.e., January 22, 2018] 

totals $795,297.20 at 10% per annum, and increases by 

$748.66 per day thereafter until entry of judgment 

($2,732,627.87 times 10% divided by 365). A chart 

summarizing the accumulated interest through the date of 

this filing is attached (hereto as Exhibit B).”

Exhibit B, as referenced above and attached to Plaintiffs’ submission of their 

proposed judgment, set forth a table or chart that listed the date and amount 

of each of the 10 payments made by Plaintiffs to M&C, as follows:
67

“Check Date Amount

“05/08/14 $ 50,000.00

“08/25/14 346,901.62

“11/25/14 633,127.47

“02/26/15 430,000.00

“02/26/15 250,000.00

“03/12/15 180,000.00

“07/25/15 741,418.00

“10/21/15 2,799.19

“10/21/15 19,627.29

“10/21/15 78,754.30

$ 2,732,627.87”24

On February 1, 2018, Defendants filed their objection to Plaintiffs’ 

proposed judgment, arguing that “the judgment should not provide for any 

award of prejudgment interest to Plaintiffs.”

On February 8, 2018, Plaintiffs filed their response to Defendants’ 

objections to their proposed judgment, arguing: “Plaintiffs are entitled to an 

award of interest pursuant to . . . section 3287.” (Italics added.) Plaintiffs 

quoted section 3287(a) and argued: “That test is obviously met here. Here, 

prejudgment interest on Plaintiffs’ section 7031 claim is required because the 

amounts ordered disgorged were ‘certain, or capable of being made certain by 

calculation.’ They are simply the amounts paid for construction by Plaintiffs 

to [M&C]. Those amounts are certain. . . . The amount of prejudgment 

interest to be awarded is easily calculated. . . . Defendants have not 

challenged [Plaintiffs’ calculation attached to their proposed judgment].” 

24 Exhibit B also listed the check number and invoice number for each of 

those 10 payments.
68

Plaintiffs further argued that the court, and not the jury, must determine 

their entitlement to prejudgment interest under section 3287.

On February 28, 2018, the trial court entered a judgment for Plaintiffs, 

which included the above provision in their proposed judgment stating: “On 

the Second Cause of Action for Disgorgement of Contractor’s Fees, the sum of 

$2,732,627.87, plus prejudgment interest at the rate of 10% per annum to the 

date hereof in the amount of $___________.” The judgment did not set forth 

the amount of prejudgment interest in the blank provided, nor did it 

expressly provide that an award of prejudgment interest, or the amount 

thereof, was yet to be determined.25

On March 16, 2018, Plaintiffs filed a document titled: “PLAINTIFFS’ 

REQUEST TO ADD AMOUNT OF PREJUDGMENT INTEREST TO 

JUDGMENT.” Plaintiffs’ request for prejudgment interest asked the trial 

court to add to its February 28, 2018 judgment prejudgment interest in the 

amount of $822,998.51 through the date of that judgment. Noting that the 

amount of prejudgment interest had been left blank in the February 28, 2018 

judgment, Plaintiffs calculated the correct amount of total prejudgment 

interest (i.e., $822,998.51) and attached an exhibit setting forth the dates and 

amounts of the 10 payments made by Plaintiffs to M&C and the amount of 

prejudgment interest that should be awarded with respect to each such 

payment.

25 In contrast, the judgment entered on February 28, 2018, included the 

handwritten acronym “TBD” in three subsequent blanks relating to Plaintiffs’ 

recovery of costs, their recovery of attorney fees, and the total amount of the 

judgment award. We presume that “TBD” is an acronym used by the court to 

indicate that those three other issues remained “to be determined.”
69

On April 23, 2018, Defendants filed their objection to Plaintiffs’ request 

for prejudgment interest and proposed nunc pro tunc amended judgment that 

would set forth the amount of prejudgment interest awarded (i.e., 

$822,998.87).26 Citing North Oakland, Defendants argued that the time for 

Plaintiffs to file a motion for an award of prejudgment interest had expired. 

They argued that in requesting an award of prejudgment interest, Plaintiffs 

did not request a hearing date or briefing schedule and therefore, Defendants

“have never received due process” as required by North Oakland. Defendants

also argued that section 3287(a) prejudgment interest cannot be awarded on 

a section 7031(b) disgorgement judgment because Plaintiffs did not suffer any 

actual monetary loss.

On April 25, 2018, Plaintiffs filed their response to Defendants’ 

objection to their request for prejudgment interest. Plaintiffs argued that 

their request was timely and that it satisfied the requirements set forth in 

North Oakland and Watson. Specifically, Plaintiffs argued that they had 

timely requested an award of section 3287(a) prejudgment interest both 

before the judgment was entered and soon thereafter, and that Defendants 

had an opportunity to respond to Plaintiffs’ requests for prejudgment interest

and had, in fact, filed their written opposition to those requests. Plaintiffs 

also argued that an award of section 3287(a) prejudgment interest is 

appropriate on the amount of a section 3071(b) judgment because the 

amounts of the payments to be reimbursed pursuant to that judgment were 

certain or capable of being made certain by calculation within the meaning of 

section 3287(a).

26 Defendants represented that on April 13, 2018, they had been served 

with Plaintiffs’ proposed nunc pro tunc amended judgment.
70

The record on appeal does not contain any order by the trial court 

either expressly approving or denying Plaintiffs’ request to add prejudgment 

interest to its judgment, until the court’s November 9, 2018 order discussed 

below. At a March 2, 2018 hearing on Defendants’ motion for reconsideration 

of the court’s denial of their request for a statement of decision, Plaintiffs’ 

counsel inquired why the court had not included the amount of prejudgment 

interest in its February 28, 2018 judgment. The court stated that its 

judgment included several blanks that would have to be determined at a later 

date. At the initial June 8, 2018 hearing on Defendants’ motion to tax costs,

in addressing a Code of Civil Procedure section 998 issue, the court stated 

that it would not sign Plaintiffs’ proposed nunc pro tunc amended judgment 

that sought prejudgment interest, based on its apparent belief that it had 

already ruled on that issue. At the continued August 3, 2018 hearing on 

Defendants’ motion to tax costs, the court maintained that it had already 

ruled on Plaintiffs’ request for prejudgment interest and had not awarded 

them prejudgment interest. Plaintiffs argued that the court had yet to rule 

on their request for prejudgment interest. The court disagreed and stated 

that to the extent Plaintiffs were asking the court to reconsider the 

prejudgment interest issue, it denied that renewed request as having been 

made without proper notice thereof.

On September 27, 2018, Plaintiffs filed a notice of motion and motion 

for an order granting their request for an award of prejudgment interest. On 

October 29, Defendants filed their opposition to Plaintiffs’ motion. On 

November 2, Plaintiffs filed their reply to Defendants’ opposition. At a 

hearing on November 9, the trial court denied Plaintiffs’ motion to add 

prejudgment interest. The court stated in part:
71

“Judgment was entered on February 28, 2018. [Citation.] 

Although the judgment included a blank line where an 

award of prejudgment interest could have been inserted, no 

amount was entered because prejudgment interest had not 

been requested by motion.

“Plaintiffs’ motion for prejudgment interest was filed 

September 27, 2018. [Citation.] The motion was filed 

beyond the time to bring a motion for new trial. . . . [¶] 

[P]laintiffs never before filed a motion under section 3287. 

The submission of a proposed judgment is not sufficient. 

Indeed, the first indication that [P]laintiffs were seeking 

interest under section 3287 was in response to 

[D]efendants’ objection to the proposed judgment. 

[Citations.]

“ . . . In contrast to Watson, the motion now before the 

Court was not made within the time for a new trial motion. 

Thus, it does not substantially comply with the statute 

governing new trial motions.”

Accordingly, the court denied Plaintiffs’ motion.

On January 25, 2019, the court entered a second amended judgment 

against M&C, Patrick, and M&A for a total amount of $2,940,325.50, which 

included the attorney fee award and costs and did not include an award of 

prejudgment interest.

C

At the outset, we address Plaintiffs’ assertion that their cross-appeal of 

the November 9, 2018 order is timely. Defendants argue that because 

Plaintiffs’ notice of cross-appeal was not timely filed, this court lacks

jurisdiction to consider Plaintiffs’ challenge to the November 9, 2018 order. 

As we explain below, we agree with Plaintiffs that their cross-appeal of the 

November 9, 2018 order is timely.
72

On November 9, 2018, the trial court issued its order denying Plaintiffs’ 

motion to add prejudgment interest to the judgment. On December 30, 2018, 

Plaintiffs filed a notice of cross-appeal challenging the court’s November 9, 

2018 order, but the notice misidentified the case number and apparently was 

electronically filed in the San Diego County Superior Court’s register of 

actions under a different case. Responding to this court’s letter of inquiry, 

Plaintiffs submitted a letter on January 28, 2019, informing us that on 

December 30, 2018, they had filed a notice of cross-appeal challenging the 

November 9, 2018 order in the instant case, but that their notice of crossappeal had been mistakenly filed in a different case (i.e., Case No. 37-2018-

00049647-CU-MC-CTL). On January 25, 2019, the court entered its second 

amended judgment, which crossed-out language included in the February 28, 

2018 judgment relating to its award on the second cause of action that read:

“plus prejudgment interest at the rate of 10% per annum to the date hereof in 

the amount of $___________.” On February 5, 2019, Plaintiffs served on all 

parties a notice of entry of the January 25, 2019 second amended judgment. 

On February 13, 2019, Defendants filed their notice of appeal challenging the 

January 25, 2019 second amended judgment. On March 6, 2019, Plaintiffs 

filed a second notice of cross-appeal, again challenging the November 9, 2018 

order. This notice of cross-appeal correctly identified the instant case 

number.

Code of Civil Procedure section 904.1, subdivision (a)(2) provides that a 

party may appeal “an order made after a judgment made appealable by 

paragraph (1).” Because the February 28, 2018 judgment was appealable 

pursuant to Code of Civil Procedure section 904.1, subdivision (a)(1), the 

November 9, 2018 order, which was issued after that judgment, is appealable 

pursuant to Code of Civil Procedure section 904.1, subdivision (a)(2).
73

The timeliness of an appeal is generally determined by California Rules 

of Court, rule 8.104(a).27 That rule provides:

“(1) Unless a statute or rules 8.108, 8.702, or 8.712 provide 

otherwise, a notice of appeal must be filed on or before the 

earliest of:

“(A) 60 days after the superior court clerk serves on the 

party filing the notice of appeal a document entitled ‘Notice 

of Entry’ of judgment or a filed-endorsed copy of the 

judgment, showing the date either was served;

“(B) 60 days after the party filing the notice of appeal 

serves or is served by a party with a document entitled 

‘Notice of Entry’ of judgment or a filed-endorsed copy of the 

judgment, accompanied by proof of service; or

“(C) 180 days after entry of judgment.”28 (Cal. Rules of 

Court, rule 8.104(a).)

Rule 8.104(b) provides: “Except as provided in rule 8.66, no court may extend 

the time to file a notice of appeal. If a notice of appeal is filed late, the 

reviewing court must dismiss the appeal.”

Defendants argue, in a conclusory manner, that Plaintiffs’ notice of 

cross-appeal was untimely because it was not filed within 60 days of the 

November 9, 2018 order. However, in so arguing, Defendants do not cite to 

any document in our records or the record on appeal (or, for that matter, in 

the register of actions maintained by the San Diego County Superior Court)

showing that a notice of entry of that order, or a filed-endorsed copy of that 

27 All references to rules are to the California Rules of Court.

28 Rule 8.108(g) provides for 20-day extensions for the time to file a crossappeal in certain circumstances, which we need not address in this case.
74

order, was served by either the San Diego County Superior Court clerk or a 

party. Such service would have triggered a shortened 60-day appeal period 

pursuant to rule 8.104(a)(1)(A) or (B) in lieu of the default 180-day appeal 

period pursuant to rule 8.104(a)(1)(C). Although the November 9, 2018 order 

expressly directed Plaintiffs “to serve notice on all parties within 2 court days 

of this ruling,” there is nothing in our records or the record on appeal (nor

apparently in the San Diego County Superior Court’s register of actions) 

showing that Plaintiffs served notice of the order on all parties.29 Because 

Defendants do not cite to, and we are not aware of, any document showing 

that either the superior court clerk or a party served a notice of entry, or a 

filed-endorsed copy, of the November 9, 2018 order, the default 180-day 

appeal period pursuant to rule 8.104(a)(1)(C) applies to Plaintiffs’ crossappeal of that order. Therefore, regardless of whether Plaintiffs’ notice of 

cross-appeal filed on December 30, 2018 or their second notice of cross-appeal 

filed on March 6, 2019 is the operative notice of appeal, Plaintiffs timely filed 

a notice of cross-appeal within the 180-day appeal period that began to run 

on November 9, 2018. Defendants do not cite to any document or authority 

persuading us to reach a contrary conclusion.

Even assuming that a 60-day appeal period applied pursuant to rule 

8.104(a)(1)(A) or (B), we would nevertheless conclude that Plaintiffs timely 

29 The November 9, 2018 order addressed both Plaintiffs’ request for 

prejudgment interest and their motion to add M&A as a judgment debtor. 

We presume that the trial court’s direction to Plaintiffs to serve all parties “of 

this ruling” was not limited to just its ruling on Plaintiffs’ motion to add 

M&A as a judgment debtor.
75

filed a notice of cross-appeal within that period.30 The notice of cross-appeal 

filed by Plaintiffs on December 30, 2018 expressly appealed from orders 

“entered on 11/09/2018 and 11/30/2018.” The only order filed by the court on 

November 9, 2018 that was adverse to Plaintiffs was its order denying their 

request for prejudgment interest. Rule 8.100(a)(2) provides: “The notice of 

appeal must be liberally construed. The notice is sufficient if it identifies the 

particular judgment or order being appealed.” When it is reasonably clear 

what an appellant is trying to appeal from and the respondent would suffer 

no prejudice, an appellate court should treat a notice of appeal as being from 

that underlying judgment or order. (Walker v. Los Angeles County 

Metropolitan Transportation Authority (2005) 35 Cal.4th 15, 18; see also Luz 

v. Lopes (1960) 55 Cal.2d 54, 59-60.) Even though Plaintiffs’ December 30, 

2018 notice of cross-appeal misidentified the superior court case number for

this case, it clearly identified the order being appealed (i.e., November 9, 

2018 order) and thereby gave Defendants notice of what order they were 

appealing. Accordingly, when Defendants were served with a notice of that 

cross-appeal, they were not prejudiced by the (presumably clerical) error in 

identifying the case number for Plaintiffs’ cross-appeal of the November 9, 

2018 order. (Cf. D’Avola v. Anderson (1996) 47 Cal.App.4th 358, 362 [“The 

30 On August 5, 2019, Plaintiffs filed the civil case information statement 

for their second notice of cross-appeal challenging the November 9, 2018 

order. Plaintiffs state therein that a notice of entry of that order was served 

on February 5, 2019, by either the superior court clerk or a party. However, 

our review of the San Diego County Superior Court’s register of actions shows 

that the notice of entry served by Plaintiffs on February 5, 2019, was a copy 

of the January 25, 2019 second amended judgment and not the November 9, 

2018 order. We therefore remain unpersuaded that a notice of entry of the 

November 9, 2018 order was served, which service would have triggered a 

shortened 60-day appeal period pursuant to rule 8.104(a)(1)(A) or (B).
76

fact that the wrong superior court case number was affixed to the notice of 

appeal does not change the result” because the California Rules of Court do 

not require any case number to be affixed to a notice of appeal to be effective]; 

Aguilar v. Gostischef (2013) 220 Cal.App.4th 475, 479 [applying D’Avola’s 

reasoning to allow appeal where notice of appeal was filed in a different 

case].) Accordingly, construing Plaintiffs’ December 30, 2018 notice of crossappeal liberally, we conclude that Plaintiffs timely cross-appealed the 

November 9, 2018 order. (Rule 8.100(a)(2); D’Avola, at p. 362; Aguilar v. 

Gostischef, at p. 479.)

D

Addressing the merits of Plaintiffs’ contention, we agree with Plaintiffs 

that the trial court erred by denying their request for an award of section 

3287(a) prejudgment interest on the ground that their request was not 

timely. As discussed above, while the trial court based its ruling at least in 

part on the fact that Plaintiffs had not filed a timely noticed motion for 

prejudgment interest, there is no statute or rule of court that establishes a 

procedure, or time limit, for requesting an award of section 3287(a) 

prejudgment interest. (Watson, supra, 2 Cal.App.5th at p. 297; Steiny & Co., 

Inc. v. California Electric Supply Co. (2000) 79 Cal.App.4th 285, 294; North 

Oakland, supra, 65 Cal.App.4th at pp. 829-830.) Rather, a request for section 

3287(a) prejudgment interest requires only that the party opposing the 

request be provided sufficient notice of the request and a reasonable 

opportunity to oppose the request. (Watson, at p. 299.) Further, that request 

must be timely made either before entry of judgment or, at the latest, within 

the time period for new trial motions under Code of Civil Procedure section 

659. (North Oakland, at p. 831; Watson, at p. 298.)
77

Based on our review of the record on appeal, we conclude that Plaintiffs 

provided Defendants with both sufficient notice of their request for an award 

of section 3287(a) prejudgment interest and a reasonable opportunity to 

oppose their request. From the beginning of this action in 2016, Plaintiffs 

alleged that they were entitled to an award of interest on their section 

7031(b) cause of action. Plaintiffs’ complaint alleged that they had made 10 

payments to Defendants, which totaled $2,732,627.87, and their second cause 

of action sought section 7031(b) reimbursement of all amounts paid to 

Defendants, “which amount is at least $2,732,627.87, plus interest.” (Italics 

added.) Further, Plaintiffs’ prayer for relief requested: “prejudgment interest 

according to law.” (Italics added.)

On January 22, 2018, Plaintiffs served Defendants with their proposed 

judgment, which included a provision for an award of prejudgment interest as 

follows: “On the Second Cause of Action for Disgorgement of Contractor’s 

Fees, the sum of $2,732,627.87, plus prejudgment interest at the rate of 10% 

per annum to the date hereof in the amount of $___________.” (Italics added.) 

Together with their proposed judgment, Plaintiffs’ counsel submitted a table 

setting forth the date and amount of each of the 10 payments made by 

Plaintiffs to M&C and provided the calculations for prejudgment interest 

through January 22, 2018 (i.e., $795,297.20) and the daily accrual amount 

(i.e., $748.66) until entry of the judgment.

Having received notice of Plaintiffs’ request for an award of 

prejudgment interest in Plaintiffs’ complaint and in their proposed judgment, 

Defendants had an opportunity to oppose, and did in fact oppose, Plaintiffs’ 

request. Specifically, on February 1, 2018, Defendants opposed Plaintiffs’ 

request for prejudgment interest by filing their objection to Plaintiffs’ 
78

proposed judgment, arguing that “the judgment should not provide for any 

award of prejudgment interest to Plaintiffs.” (Italics added.)

On February 8, 2018, Plaintiffs responded to Defendants’ opposition to 

their request for prejudgment interest and objections to their proposed 

judgment, arguing: “Plaintiffs are entitled to an award of interest pursuant 

to . . . section 3287” on their section 7031(b) claim. (Italics added.)

Based on the above pleadings, we conclude that Plaintiffs provided 

Defendants sufficient notice of their request for an award of section 3287(a) 

prejudgment interest and that Defendants had a reasonable opportunity to 

oppose that request, which is confirmed by Defendants’ filing an opposition to 

that request. Further, Plaintiffs’ request for section 3287(a) prejudgment 

interest was timely because it was made before entry of judgment on 

February 28, 2018. (North Oakland, supra, 65 Cal.App.4th at p. 831; Watson, 

supra, 2 Cal.App.5th at pp. 298-299.)

Even if we were to presume that Plaintiffs’ prejudgment request for an 

award of section 3287(a) prejudgment interest was not sufficient to give 

Defendants notice of that request, we would nevertheless conclude that 

Plaintiffs’ subsequent additional request after entry of the judgment provided 

Defendants sufficient notice of that request and a reasonable opportunity to 

oppose it. On February 28, 2018, the court entered a judgment for Plaintiffs, 

including a provision stating: “On the Second Cause of Action for 

Disgorgement of Contractor’s Fees, the sum of $2,732,627.87, plus 

prejudgment interest at the rate of 10% per annum to the date hereof in the 

amount of $___________.” On March 16, 2018, presumably because the 

judgment did not set forth the amount of prejudgment interest in the blank 

provided therefor, Plaintiffs filed a request for the court to add to its 
79

February 28, 2018 judgment prejudgment interest in the amount of 

$822,998.51 through the date of that judgment.

We conclude that Plaintiffs’ March 16, 2018 request for prejudgment 

interest was timely made, provided Defendants with sufficient notice of that 

request, and allowed Defendants a reasonable opportunity to oppose it.

Plaintiffs’ request was timely because it was filed within the time period for 

filing a motion for new trial. As with a motion for new trial, a request for 

prejudgment interest must be filed “[w]ithin 15 days of the date of mailing 

notice of entry of judgment by the clerk of the court . . . or service upon 

[Plaintiffs] by any party of written notice of entry of judgment, or within 180 

days after the entry of judgment, whichever is earliest.” (Code Civ. Proc., 

§ 659, subd. (a)(2); North Oakland, supra, 65 Cal.App.4th at pp. 830-831; 

Watson, supra, 2 Cal.App.5th at pp. 298-299.) Our review of the record on 

appeal did not locate, and Defendants do not cite to, any notice of entry of the 

February 28, 2018 judgment that was served by either the superior court 

clerk or a party.31 Therefore, the applicable period for a timely motion for 

new trial, and thus for a timely request for section 3287(a) prejudgment 

31 Further, the superior court’s register of actions does not appear to 

contain a notice of entry of that judgment served by either its court clerk or a 

party. Although Plaintiffs state in their cross-appellants’ opening brief that 

they served a notice of entry of judgment on March 16, 2018, they provide no 

citation to the record in support of that statement and our review of the 

record on appeal does not reflect any such notice of entry. Nevertheless, even 

if Plaintiffs had served a notice of entry on March 16, 2018, their request for 

an award of section 3287(a) prejudgment interest was filed on March 16, 

2018, and was therefore timely filed within the 15-day period for filing new 

trial motions (i.e., on or before March 31, 2018). (Code Civ. Proc., § 659, subd. 

(a)(2).)
80

interest, is within 180 days after the entry of the judgment on February 28, 

2018. (Code Civ. Proc., § 659, subd. (a)(2); North Oakland, at pp. 830-831; 

Watson, at pp. 298-299.) Because Plaintiffs’ March 16, 2018 request for an 

award of section 3287(a) prejudgment interest was filed 16 days after the 

judgment was entered on February 28, 2018, their request was timely. 

Further, Plaintiffs’ March 16, 2018 request was sufficient because it 

provided Defendants and the trial court with the relevant information that 

Plaintiffs were requesting an award of section 3287(a) prejudgment interest. 

(Watson, supra, 2 Cal.App.5th at p. 299.) In particular, Plaintiffs’ request, 

like the request in Watson, clearly identified the relief requested (i.e., the 

addition of prejudgment interest to the judgment amount) and the grounds 

on which that request was based (i.e., § 3287(a) and Plaintiffs’ assertion that 

their § 7031(b) award was liquidated). (Cf. Watson, at p. 299.) Also, 

Plaintiffs’ request, like the request in Watson, provided Defendants with a 

reasonable opportunity to oppose the request, as is evident from Defendants’ 

written opposition filed with the court on April 23, 2018. We therefore 

conclude that Plaintiffs’ request gave Defendants sufficient notice of their 

request for an award of section 3287(a) prejudgment interest and that 

Defendants had a reasonable opportunity to oppose that request, which is 

confirmed by Defendants’ actual opposition to that request, filed on April 23, 

2018. Accordingly, we conclude that the trial court erred in determining that 

Plaintiffs’ additional request for an award of section 3287(a) prejudgment 

interest filed on March 16, 2018 was untimely and/or insufficient to provide 

Defendants with notice of Plaintiffs’ request and a reasonable opportunity to 

oppose the request. As noted, contrary to the trial court’s apparent belief and 

Defendants’ argument, unlike a motion for new trial, no formal motion is 

required to request an award of section 3287(a) prejudgment interest. 
81

(Watson, supra, 2 Cal.App.5th at p. 299.) To the extent that there is 

language in North Oakland that would support a contrary position, we 

disagree with it and decline to adopt it and instead conclude that the 

reasoning in Watson is more persuasive.32

E

Plaintiffs also contend that they are entitled to an award of 

prejudgment interest under section 3287(a) as matter of law because their 

section 7031(b) reimbursement award was certain or capable of being made 

certain by calculation. Plaintiffs’ complaint alleged that they had made 10 

payments to Defendants, which totaled $2,732,627.87, and their second cause 

of action sought section 7031(b) reimbursement of all amounts paid to 

Defendants. Their complaint specifically alleged the date and amount of each 

of those 10 payments. In support of Plaintiffs’ motion for summary 

adjudication of their second cause of action against M&C, they submitted a 

separate statement of undisputed material facts, which asserted that 

32 North Oakland stated that “requests for prejudgment interest under 

section 3287 by a successful plaintiff must be made by way of motion prior to 

entry of judgment, or the request must be made in the form of a motion for 

new trial no later than the time allowed for filing such a motion. (Code Civ. 

Proc., § 659.)” (North Oakland, supra, 65 Cal.App.4th at p. 831.) Watson

subsequently declined to require a formal motion for a request for 

prejudgment interest, instead stating: “[T]he fact that Watson’s request [for 

prejudgment interest] was not labeled as [a] motion for new trial or as a 

motion for modification under Code of Civil Procedure section 657 does not 

render its format defective. [Citations.]” (Watson, supra, 2 Cal.App.5th at 

p. 299.) As Watson noted, “[n]o statutes specify the timing or mechanism for 

seeking prejudgment interest” and “no rule of court specifies when 

prejudgment interest must be sought.” (Id. at p. 297.)
82

Plaintiffs had paid M&C $2,732,627.87 for the construction of their home. In 

support of their opposition to the motion, Defendants submitted their 

separate statement that, in effect, admitted that Plaintiffs had paid 

Defendants that amount, stating: “Plaintiffs disbursed to M&C 

$2,732,627.87 for the materials supplied and services rendered during the 

construction of [Plaintiffs’ home].” As discussed above, the trial court 

subsequently granted Plaintiffs’ motion for summary adjudication, finding 

that Plaintiffs were entitled to section 7031(b) reimbursement from M&C in 

the amount of $2,732,627.87. The court thereafter entered the judgment 

awarding Plaintiffs $2,732,627.87 on their section 7031(b) reimbursement 

cause of action.

Based on the record, Plaintiffs’ section 3287(a) reimbursement damages 

(i.e., $2,732,627.87) were clearly “certain, or capable of being made certain by 

calculation,” within the meaning of section 3287(a). Specifically, Defendants 

knew, or should have known, the date and amount of each of Plaintiffs’ 10 

payments to M&C. An award of section 3287(a) prejudgment interest to 

Plaintiffs is therefore mandatory and not within the discretion of the trial 

court. (North Oakland, supra, 65 Cal.App.4th at p. 828 [under § 3287(a), “the 

court has no discretion, but must award prejudgment interest upon 

request.”]; Watson, supra, 2 Cal.App.5th at p. 293 [same].)

F

Contrary to Defendants’ argument, an award of section 3287(a) 

prejudgment interest is mandated on a section 7031(b) reimbursement award 

if the amount of reimbursement was certain or capable of being made certain 

by calculation. (§ 3287(a).) The purpose of section 3287(a) prejudgment 

interest is to “compensate[] the plaintiff for the loss of the use of property or 
83

money during the period before the judgment is entered.” (Watson, supra, 2 

Cal.App.5th at p. 293.) Alternatively stated, “[f]rom a plaintiff’s perspective, 

prejudgment interest compensates [the plaintiff] for the loss of use of the 

money during the period between the assertion of the claim and the rendition 

of judgment.” (Ibid.) Section 3287(a) prejudgment interest is intended to 

compensate a plaintiff “for loss of use of the award during the prejudgment 

period.” (Lakin v. Watkins Associated Industries, supra, 6 Cal.4th at p. 663, 

italics added.) Contrary to Defendants’ assertion, section 3287(a) 

prejudgment interest is not limited to contractual or compensatory damages 

and their citation to North Oakland, supra, 65 Cal.App.4th at page 826, does 

not set forth any such limitation. Rather, as Plaintiffs note, section 3287(a) 

applies to causes of action arising in tort, contract, or otherwise, provided

that the damages awarded were readily ascertainable. (Wisper Corp. v. 

California Commerce Bank (1996) 49 Cal.App.4th 948, 958 [§ 3287’s 

“application to actions other than contract actions, such as tort actions, is 

well established”]; Marine Terminals Corp. v. Paceco, Inc. (1983) 145 

Cal.App.3d 991, 995 [§ 3287(a) “allows recovery of prejudgment interest in 

causes of action other than contract. The crucial factor is . . . whether the 

damages were readily ascertainable”].) “When Civil Code section 3287 was 

‘adopted in 1872, the key distinguishing factor was not . . . whether the cause 

of action arose in tort or contract, but rather whether the damages were 

readily ascertainable.’ [Citation.]” (Wisper Corp., at p. 958, quoting LevyZentner Co. v. Southern Pac. Transportation Co. (1977) 74 Cal.App.3d 762, 

795.) Section 3287(a) “has been applied consistently to allow the recovery of 

prejudgment interest in causes of action other than those in contract.” (LevyZentner Co., at p. 796.) There is nothing in the language of section 3287(a) 

that limits its provisions for prejudgment interest to only contract causes of 
84

action. Further, there is nothing in its language that precludes an award of 

prejudgment interest on section 7031(b) reimbursement awards.

Section 3287(a) generally provides that prejudgment interest must be 

awarded to “[a] person who is entitled to recover damages certain, or capable 

of being made certain by calculation . . . .” Section 7031(b) provides that a 

person who uses an unlicensed contractor “may bring an action . . . to recover 

all compensation paid to the unlicensed contractor . . . .” By providing for the 

recovery of all compensation paid, section 7031(b), in effect, allows a plaintiff 

to recover, as damages, all compensation paid to the unlicensed contractor. 

Therefore, the damages sought by a plaintiff under section 7031(b) consist of 

all compensation paid to an unlicensed contractor, which are sought to be 

recovered in a section 7031(b) reimbursement action.

To the extent that section 3287(a) prejudgment interest is arguably 

limited to cases in which compensatory damages are sought in a contract, 

tort, or other cause of action, a section 7031(b) reimbursement cause of action 

has been viewed as “fundamentally contractual in nature since it is based on 

an unlicensed contractor’s agreement with the beneficiary to provide services, 

and the beneficiary’s agreement to pay for same.” (Goldstein v. Barak 

Construction (2008) 164 Cal.App.4th 845, 854.) Because a section 7031(b) 

plaintiff seeks compensatory damages in the form of reimbursement for all 

compensation paid to an unlicensed contractor pursuant to an express 

written or oral contract or an implied construction agreement, that plaintiff is 

entitled to an award of prejudgment interest under the express provisions of 

section 3287(a) if the plaintiff shows that those compensatory damages were 

certain or capable of being made certain by calculation. Contrary to 

Defendants’ apparent assertion, we discern no inconsistency in viewing a 

section 7031(b) award as compensatory damages while also viewing such an 
85

award as a statutory penalty, as discussed in part V above. (See, e.g., MW 

Erectors, supra, 36 Cal.4th at pp. 418, 423, 425; Hydrotech, supra, 52 Cal.3d 

at pp. 995, 997; Alatriste, supra, 183 Cal.App.4th at pp. 666-667.) Rather, we 

conclude that a section 7031(b) reimbursement award is properly, and 

consistently, viewed as both an award of compensatory damages based on the 

amount of compensation paid to an unlicensed contractor and a statutory 

penalty imposed against an unlicensed contractor based on section 7031(b)’s 

public policy purpose of deterring violations of contractor licensing laws. 

(MW Erectors, at pp. 418, 423, 425; Hydrotech, at pp. 995, 997; Alatriste, at 

pp. 666-667.) Defendants do not cite any case in support of their assertion or 

otherwise persuade us to reach a contrary conclusion. Further, contrary to 

Defendants’ assertion, an award of section 3287(a) prejudgment interest on a 

section 7031(b) reimbursement award would not constitute “punitive 

damages,” but instead, is compensation for the loss of the use of that money 

paid to an unlicensed contractor from the time of payment through the date 

of the judgment.

G

The legislative intent underlying section 7031(b) also supports a 

plaintiff’s entitlement to prejudgment interest under section 3287(a). As 

discussed above, the Legislature intended that section 7031(a) and section 

7031(b) be interpreted in a consistent manner so that the same remedy 

applies regardless of whether the unlicensed contractor is the plaintiff or 

defendant. (White, supra, 178 Cal.App.4th at pp. 519-520; see also Alatriste, 

supra, 183 Cal.App.4th at p. 666.) The Legislature therefore intended that a 

section 7031(b) plaintiff be placed in as good a position as a section 7031(a) 

defendant. A section 7031(a) defendant uses that statute as a shield, 

preventing an unlicensed contractor from obtaining compensation for services 
86

performed or materials provided that require a contractor’s license. As a 

result, a section 7031(a) defendant naturally will not suffer any loss of the 

use of money from the time those services were performed or materials 

provided through the date of the judgment and therefore, would have no need 

for an award of section 3287(a) prejudgment interest. (Cf. Watson, supra, 2 

Cal.App.5th at p. 293.)

In contrast, a section 7031(b) plaintiff necessarily will have suffered a 

loss of the use of money from the time the plaintiff paid an unlicensed 

contractor for services or materials through the date of the judgment. 

Regardless of the length of that time period (e.g., months or years), there is a 

“time-value” to that money during the period that the unlicensed contractor 

retains that money and the plaintiff has lost use of that money. In order to 

place a section 7031(b) plaintiff in the same position as a section 7031(a) 

defendant, as the Legislature intended, a section 7031(b) plaintiff should be 

compensated for the loss of the use of the money paid to an unlicensed 

contractor by an award of prejudgment interest on the amount of a section 

7031(b) reimbursement award.

Accordingly, an award of section 3287(a) prejudgment interest on a 

section 7031(b) reimbursement award carries out the legislative intent 

underlying section 7031(b). To deny a section 7031(b) plaintiff prejudgment 

interest would have the practical effect of treating section 7031(a) defendants 

and section 7031(b) plaintiffs disparately and would, in effect, deprive section 

7031(b) plaintiffs of the same remedy that section 7031(a) defendants have. 

(White, supra, 178 Cal.App.4th at pp. 519-520; Alatriste, supra, 183 

Cal.App.4th at p. 666.) Further, if the Legislature had intended to disallow a 

section 3287(a) prejudgment interest award for section 7031(b) plaintiffs, we 

presume that it would have expressly so provided. “The Legislature is 
87

presumed to be aware of existing laws . . . when it enacts legislation.” 

(Alatriste, at p. 670.) Because the Legislature did not do so, we conclude that 

it intended section 7031(b) plaintiffs to recover section 3287(a) prejudgment 

interest on section 7031(b) reimbursement awards. (Cf. Alatriste, at p. 670.)

DISPOSITION

The order dated August 3, 2018, granting in part Plaintiffs’ motion for 

attorney fees under section 1029.8, and the order dated November 9, 2018, 

denying Plaintiffs’ request for prejudgment interest under section 3287(a),

are reversed. In all other respects, the judgment and orders are affirmed. 

The matter is remanded with directions that the superior court issue a new 

order denying Plaintiffs’ motion for an award of section 1029.8 attorney fees 

and granting their request for an award of section 3287(a) prejudgment 

interest and enter a new judgment consistent with this opinion.

AARON, J.

WE CONCUR:

HUFFMAN, Acting P. J.

GUERRERO, J.