### IN THE SUPREME COURT OF TENNESS EE AT KNOXVILLE January 8, 2003 Se ssion

RI CK K YLE v. EAR L WI LL I AMS an d MI CHE LL E WI LL I AMS
Appeal by Permission from the Court of Appeals, Eastern Section

Chancery Court for Monroe County No. 12614 Jerri S. Bryant, Chancellor

No. E2002-00091-SC-R09-CV - Filed March 3, 2003

We granted the plaintiff’s application for per mission to appeal to determine whethe r the Chancellor

erred in holding that

a co ntractor is unlicensed for purposes of Tennessee Code Annotatedsection 62-6-103(b), and therefore is limited to a rec overy of do cumented expenses proven by clear and convincing evidence , where the contractor possessed a valid contr actor’s license when the cont ract was formed but did not maintain a valid license throughout the e ntire time contrac ting servi ces were performed under the contract. After carefully considering the relevant statutes, we conclude that the Chancel lor properly he ld that a contractor who does not mainta in a va lid license throughout the entire contract period is unlicensed f or purposes of Tennessee Code Annotated section 62-6-103(b) and limited to a recovery of documented expenses proven by cle ar and convincing evidence.

Tenn. R. App.P. 11; J

udgment of the Trial

Court Affir

med; C ase Rem

anded

F RANK F. D ROWOT A , III, C.J., delivered the opinion of the court, in which E

. R ILE Y A NDERSON , A DOLPHO A. B IRCH , J R ., J ANICE M. H OLDER , and W IL LI AM M. B ARKER , JJ., joined.
Van R. Michael, Sweetwater, Tennessee, f or the appellant, Rick Kyle. H. Chris Trew, Athens, Tennessee, for the appe llees, Earl Williams and Michelle Williams.

OPINION Background The plaintiff, Rick Kyle, filed a complaint asserting that he had ent ered i nto a contract withthe defenda nts, Earl and Michelle Williams, for the construction of a house and that the defenda nts had refused to pay

the balance due under the cont ract. The defendants filed an
answer deny ing any liability under the

contract on the ba sis that the plaintiff did not hav e a valid cont ractor’s license when the house was under construction and a lso that the plaintiff had faile d1 In li ght of thi s conclu sion, the Chancel lor f ound that

the prec ise dat e on which work under t he contr act began w as not

rel evant or det ermi nati ve. The plai nti ff had cont

ended t hat work be gan on or about Janua ry 12, 1998, befo re exp iration o f his license , while the d efend ants co ntend ed w ork b egan on F ebru ary 1, 1 998 , after the p laintiff’s li cens e expi red.
-2- to co nstruct the residence in a good and workmanlike ma nner and in accordance with the plans and spec ificatio ns of the c ontract

. Prior to trial, t h e partie s asked the Chancellor to determine whether the plaintiff wa s an “unlicensed

contractor” f

or purposes of Tennessee Code Annotated section 62-6- 103(b), which provides that “[ a]ny unlicensed contra ctor covered by

the provisions of this chapter shall be permitted in a court of equity to recover actual documented expenses onl y upon a showing of clear and convincing proof.”

The facts pertinent to this issue were s tipu lated by the par ties and incorporated in the Chancellor’s Janua

ry 4, 2002 or

der as f ollows:

1. The parties entered i n to a contract November 11, 1997 which provides that the plaintiff will cons truct a residence for the defendants for a contract price of $80,000.00. 2. The plaintiff had a valid contractor’s license on Nove mber 11, 1997. 3. The contractor’s license of the plaintiff expired January 31, 1998. 4. The plaintiff performed contracting work unde r t he cont ract from February 1, 1998 through April 19, 1998. 5. The plaintiff filed for rene wal of his contractor’s license on or about May 5, 1998.

The Chancellor concluded that a contractor is unlicensed f or purposes of Tennessee Code Annotatedsection 62-6-103(b) if the contractor does not maintain a valid contr actor ’s lic ense throu ghout the entire time contracting services ar e performed under the contract. Since the stipulated facts indicated that the appellant did not have a valid licens e while performing contracting services after January 31, 1998, the Chancellor held the plaintiff was an unlicensed contractor, entitled to recove r actual do cumented expenses only upon a showing of clear and convincing proof pursuant to Tennessee Code Annota ted section 62-6-103(b). 1

In order to

avoid needless , expensive, and protracted litigation and to develop a body of law interpreting Tennessee Code Annotated section 62 -6-103(b) , the Chancellor granted the plaintiff’s application fo r permiss io n to seek a n interloc utory appeal p ursuant t o Tennes see Rule of Appellate Procedure 9. The Court of Appeals, howe ver, denied the plaintiff’s request for an interlocutory

appeal. Thereafter, this Court gra nted t he plaintiff

’s applic ation for

permissio n to appeal, and for the following rea sons, we now affirm the judgment of the trial court.

Standard of Review The issue in this appeal is a question of law involving both statutory interpretat ion a nd the application of the statute to undisputed facts. Our review is de nov o with no pres umption of2 See Tenn. Cod e Ann. § 62-6-102(2).
-3-

correc tness attached to the judgment of the trial court. See Ki v. State , 78 S.W.3d 876, 87 9 (Tenn. 2 002); State v. Tr

oxell , 78 S.W.3d 866, 870 (Tenn. 2002).

Rules of Statutory Construction Resolution of the issue in this appeal requires a review and i nterpretat ion of several statutory provisions. The duty of this Court in construing statutes is to effectuate legislative intent. See State v. Alford , 970 S.W.2d 9 44, 946 (T enn. 1998 ); Carter v . State , 9 52 S.W.2d 417, 419 (Tenn. 1 997); Wilson v. Johns on County , 879 S.W.2 d 807, 809 (Tenn. 1994). Legislative intent is to be ascertained primarily from the natural and ordinary meaning of the languag e used. See State v. Wa

lls , 2 S.W.3d 119, 121 (T enn. 2001). Where the language used is devoid of
am bi gu it y, we must apply its plain meaning without a forced interpretation that would limit or expand the statute's scope. Id. In sh ort, this Court must presume that the legislature say s in a statute what it me ans and me ans in a st atute wha t it say s. Gleave s v. Ch ecker C ab Tran sit Corp. , 15 S.W.3d 799, 803 (Tenn. 2000).

We begin with Ten nessee C ode Annotated section 62-6-103(a) which provides that any person engaged in “contra cting” shall submit “evidence o f q ualifica tion to eng age in
con tra cting” and “shall be licensed as hereinafter provided.” The term “contracting” is defined by statute as “any

per son or entity who perf orms or causes to be performed any of the activities definedin” Tennessee Code Annotated section 62 -6-102(3)(A) & (6). 2 Theref ore, pur suant to Section 62-6-102(3)(A), a license is required f or

any person or

entity who under

takes to, attempts t

o, or sub mits a price or bid or offers to construct, supervise, superintend, oversee, schedule, direc t, or in any
manner assume charge of the constr uction, a lteratio n, repai

r, improv ement, movement , demolition, putting up, tearing down, or furnishi ng labor to in stall material or equipment for any building, highway , road, rai lroad, sewer, gradin g, excavation, pipeline , public ut ility structur e, pro

ject d evelo pment , hous ing, housing developm

ent, impro vement, o

r any other co nstr

uc tion undertaking for which the total c ost of the same is tw en ty-five thousand dollars ( $25,000) or
more.
Tenn. Code Ann. § 62-6-102( 3)(A). A license also is required for “one whose services are lim i ted to construction, remodelling, repair, or improvement of one ( 1), two (2), three (3), or four (4) family

unit resid

ences not exceeding (3) s tories i n he ight and access ory

use structures in connection therewith.” Tenn. Code Ann. § 62-6-102(6).

The plaintiff advances three reasons to support his arg ument that these statutes allow a contractor

to recover under the terms of the contra ct if the contractor had a valid license at th e time the contract was formed and work began, e ven if the license expired before the work was
co mpleted. First, the plaintiff says tha t any other rule

would unjustly enrich the defe nda nts b y allowing the m to retain possession of the house but pay less than the agreed upon price. Sec ond,-4-

according to the plaintiff, limiting the contractor’s reco very in such situa

tions to only

those documentedexpenses proven by cle ar and con vinci ng evidenc e would imp ose a disp roportio nate pen alty for wha t he describes as a technical violation of the licensing statutes. Finally, the plaintiff says that statutes should not be construed to alter the common law further t ha n the act expressly declares, and rely

ing on a tr eatise, the plaintiff asserts that an unlicensed contractor at
common l aw cou ld recover either the agr eed upon contract price or the rea sonable value of the benefits received and retained. Contrary to the plaintiff’s assertion, courts of Tennessee for ma ny y ears held that an unlicensedcontractor had no right to rec over under the contract. See Farmer v. Farmer , 528 S.W.2d 539, 541 (Tenn. 1975) (“There is in this State a long, unbroken line of a uthoritie s back to the year 1888 to the e

ffect that those unlicensed cannot enforce their contracts.”) (citing ca ses). Moreover, pri or to the enactment of Se ction 62- 6-103(b) , unlicen sed contr actors h ad no rig

ht to
recover bas ed on quantum meruit – the reasonable value of the bene fits received and retaine d

. See id. at 542 (“ [I]n our jurisdict ion, quan tum meruit

has been

specific ally

consi de red and rejected.”). In explaining these rules, this Court in Farmer adopted t

he foll owin g rationale from a decisi on of the Wa shington Supreme C ourt:
The [c ontractor’s licensing] statute was designed for protection of the public. The overriding public pol

icy must not be defe ated by an a ttempt to accommodate one wh o has violated its specific provisions, albeit unwittingly. T he law will b e nullified if noncom

plyin g contr acto rs are p ermitted to evade the statut e by a claim of ‘ unwitting violation’ or ‘undue loss’ or by a claim that the other con tractin g party will be ‘u

nduly enriche d.’ Ever

y no ncomply

in g contrac tor could raise one
or all of the suggested defenses. The remedy f or those who find themselves in the position of appellant lies with the legislature.

Id. at 542 (quot ing Stewart v. Hammond , 471 P.2d 90, 92 (Wash. 1970)). Therefore, the
s tatutory provision allowing unlicensed contractors to recover only documented expenses prove n by clear and convincing evidence is an expansion of the r emediesprevious ly a vailable to unlicensed con tractors in Tennessee. See Chedester v. Phillips , 640 S.W.2d 207, 209 (Tenn. 1982) (stating that t he “harsh rule of Farmer ” had “previously barred unlicensed gener al contractors from recove ry either on the contract or on quantum m eruit ” and noting that the General Assembly had alleviate d that rule by e nacting a statute permitting unlicensed contra ctors to recover documented expenses proven by clear and convincing evidence). Thus, t he rule t hat a statute shoul d not be construed to alter the common law further than the act expressly declar e s actually under

cuts, rather than supports, the plaintiff’s position.

Also without merit are the plai ntiff’ s contentions that principles of quantum meruit and unjust enrichm ent should

preclud e this Cour

t from a ffirming

the Chanc ellor’s holding th at a contr a ctor

must maintain a valid license for the duration of the contract. I n our view, the langua ge of the licensing statutes, particularly Sections 62-6-102(3)(A) & (6), is cry stal-clear and requires no i nterpretation. “Contracting” encompasse s all phases and aspects of construction

––from contract formation through the contract’s completion. Any person or enti ty who engages in any of the activities classified as “contracting” must submit evidence of qualifica tions3 Act of Feb. 28, 1945, ch . 135, § 1, 1945 Tenn . Pub. Acts 416, 417 ( codif ied a t 4 Will iams Code of Tennessee § 71 82.25 (Supp . 1952)).
-5- and be licensed. See Tenn. Code Ann. § 62-6-10 3(a ). If a person engag es in any

of these activities without possessing a valid license, then simple logic dictates that t he person is an unlicensedc ontract

or for pu rposes of Tenness ee Code A

nnotated section 6 2-6-103(

b) and is limited in recovery to those doc umented expenses proven by c lear and convincing evidence.

The G eneral

Assembly

long ag o determ

ined that persons e

ngag ed in cons truction m ust b e licensed“in order to safeguard life, he alth and property , and to promot e publ ic welfare.” 3 Likewise, the court s of this State have recognized that the purpose of these c ontractors’ licensing statutes is to protect the safety and property

of t he pub lic. See Gene Tay lor & Sons Plumbing Co. v. Corondolet Realty Tru st , 61 1 S.W.2d 572, 576 (Ten n. 1981); Farmer , 528 S.W.2d at 542; Winterv. Smith , 914 S.W.2d 527, 538 (Tenn. Ct. App. 1995). Simply possessing a valid licens e at the time a

contract is forme d or at the time work

begins i s not suff

icient to s a tisf

y either the letter or the purpose of these statutes. “C ontracting” is defined to encompass all stag es and acti vities of a c onstruction project. The statute expressly r equires persons engaging in any of these activities to be licensed. As the defendants point out, the purpose of the c ontract or’s licensing statutes i s not to test a person ’s contr

act dra fti ng abili t ies but to ensure that the person is qualifie d to perf

orm the wo

rk requi red to fulfill the te

rms o f the contract. Furthermore, construction proje c ts can, a nd often d

o, extend ov er a per

iod of y ears. G iven this r

eality , it would be nonsensical to interpr et t hese statutes as only re quiring a license at contract formation when the bulk of

the contr acting activity at which t

hese lic ensing s tatutes a

re dir ec ted would be performed after the license had e xpired.

Conclusion Based on the plain language of the statutes, and in light of the purpose these statutes are designed t o serve, we conclude that the Chancellor cor rectly held that a

contractor is unlicen se d for purposes of Tenn essee Code Annotated section 62-6-103(b) if the contractor doe s not maintain a valid c ontract

or’s lice nse thro ughout the entire time contracting servic es are performed

under the contract. I

t is undisputed tha t the plaint iff’s contractor’s license expired before completion of t he wo rk required by the contract. Therefore, the plaintiff is an unlice nsed contractor

for purposes of Tennessee Code A nnotated section 62-6-103(b). Costs of this appeal
are taxed to th e plaintif

f Rick Ky

le, for w hich execution may

issue if ne

cessar y. T his case is remanded to the trial court for further nec essary pr oceedings, consistent with this opinion.

_______________________________________ FRANK F. DROWOTA, II I, CHI EF JUSTICE