Filed 7/14/15 Strle Enterprises v. Western Air Limbach CA2/5

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

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FIVE

STRLE ENTERPRISES, INC.,

Plaintiff, Cross-defendant, and 

Appellant,

v.

WESTERN AIR LIMBACH LP,

Defendant, Cross-complainant, and 

Respondent.

 B256743

 (Los Angeles County Super. Ct. 

 No. BC457308)

APPEAL from the judgment of the Superior Court of Los Angeles, Malcolm 

Mackey, Judge. Affirmed. 

Law Offices of F. Glenn Nichols and F. Glenn Nichols for Plaintiff, Crossdefendant, and Appellant.

Poindexter & Doutré, Inc. and Jeffrey A. Kent for Defendant, Cross-complainant, 

and Respondent. 

________________________
2

Plaintiff, cross-defendant, and appellant Strle Enterprises, Inc. (Strle) appeals from 

the judgment dismissing its complaint for breach of contract against defendant, crosscomplainant, and respondent Western Air Limbach LP (Limbach), and awarding 

Limbach recovery of payments previously made to Strle on its cross-complaint.

The sole issue on appeal is whether the Construction Services Licensing Law, 

Business and Professions Code section 7000 et seq. (CSLL)1 bars Strle from maintaining 

any action for recovery because it was not properly licensed at all times during its 

performance of the contract.

We affirm.

FACTS AND PROCEDURAL HISTORY2

Strle entered into a written subcontract agreement with Limbach, under which 

Strle agreed to furnish and install radiant ceiling panels in school buildings that Limbach 

had subcontracted to build for the Los Angeles Unified School District.3

Under change order No. 1, the parties agreed to remove the furnishing and price of 

the radiant panels from the subcontract by creating a separate purchase agreement. 

Subsequent to change order No. 1, the subcontract was for installation only. Under a 

 

1 Unless otherwise indicated, all further statutory references are to the Business 

and Professions Code.

2 Neither party challenges the trial court’s findings of fact in its statement of 

decision. Our recitation of facts relies primarily on the statement of decision and the trial 

exhibits cited in that decision.

3 Radiant panels provide an alternative to traditional methods of air distribution in 

heating and cooling systems. They are suspended from a metal and/or concrete deck 

below the ceiling of the room in which they are installed. The panels are connected to the 

deck with a seismically engineered system of rods, cables, and attachments. 
3

second change order agreement, Strle agreed to “[i]nclude the providing and installation 

of the seismic restraint for the radiant panels.” 

Following installation, the parties disagreed as to whether the work performed 

under the subcontract was timely, satisfactory, and complete.4 Limbach paid Strle 

$443,625.03 for the installation work, which was less than the agreed-upon price.5

Strle brought suit against Limbach for: (1) money due on the subcontract; (2) 

open book account; (3) account stated; and (4) reasonable value of labor and materials 

furnished. Limbach cross-complained for damages for breach of the subcontract.

The case was tried to the court. The parties stipulated that Strle did not have and 

had never had a California contractor’s license, and that Limbach paid Strle a total of 

$443,625.03 under the subcontract. 

Two days into the trial, the trial court ordered the trial bifurcated. The court first 

heard the parties’ arguments as to whether Strle was required to have a contractor’s 

license to install permanent fixtures under the subcontract. It held that section 7031 

required licensure for the installation work, that Strle was not licensed, and that no 

exemptions to section 7031 applied. It specifically rejected Strle’s arguments that 

licensure could be excused because: (1) Strle’s president, Richard Strle, was individually 

licensed; (2) Strle’s sister corporation, Air Performance H.V.A.C., Inc. (Air Performance) 

allegedly performed the installation work; (3) as a mere supplier of the radiant panels 

rather than the actual installer, Strle was exempted under section 7052; and (4) as an 

installer of products that were not fixtures, Strle was exempted under section 7045. The 

court dismissed Strle’s complaint, and awarded Limbach recovery of the $443,625.03 in 

payments made on its cross-complaint. 

Strle timely appealed.

 

4 Performance under the purchase agreement was not at issue.

5 The trial court made no finding as to the precise amount of the contract price, 

which was not necessary to its resolution of the issues.
4

DISCUSSION

In its opening brief, Strle argues that the trial court erred in finding the complaint 

barred pursuant to section 7031, because the policy objectives behind the CSLL were 

met. Strle asserts that the interests of the public were protected because all installation 

work was done by Air Performance, its duly licensed sister company, and supervised by 

Richard Strle, the president and owner of both Strle and Air Performance, who was also 

licensed.6 We disagree.

Relevant Law

“[Whether the trial court erred in applying section 7031] is a question of law to 

which we apply a de novo standard of review. (Parsons v. Bristol Development Co.

(1965) 62 Cal.2d 861, 861-865; see also Code Civ. Proc., § 589.)” (Vallejo Development 

Co. v. Beck Development Co. (1994) 24 Cal.App.4th 929, 937 (Vallejo).)

Section 7031, subdivision (a) provides that “no 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 performance 

of that act or contract, regardless of the merits of the cause of action brought by the 

person.” “‘[T]he bar extends to actions “in law or equity”. . . . [Citation.]’ [Citation.]” 

 

6 Strle does not contend the radiant panels are not fixtures for the purposes of the 

CSLL. In addition, it has waived any other arguments it purports to have made by either 

failing to support them with argument and legal precedent, or by failing to raise them in 

its opening brief. (Cal. Rules of Court, rule 8.204(a)(1)(B) [contentions must be 

supported by argument and citation to legal authority]; Boyle v. CertainTeed Corp. 

(2006) 137 Cal.App.4th 645, 649-650 [same]; Campos v. Anderson (1997) 57 

Cal.App.4th 784, 794, fn. 3 (Campos) [points raised in the reply brief for the first time 

will not be considered].)
5

(WSS Indus. Const., Inc. v. Great West Contractors, Inc. (2008) 162 Cal.App.4th 581, 

587 (WSS).) There are a few narrow exceptions to section 7031, subdivision (a) –

notably for those who sell and install articles that are not a fixed part of the structure 

under section 7045, and for those who furnish materials only under section 7052 – neither 

of which apply in this case.7

“The CSLL embodies a comprehensive legislative scheme governing the 

construction business in California. It reflects a strong public policy, which favors 

protecting the public from unscrupulous and incompetent contractors. According to our 

Supreme Court, ‘The purpose of the licensing law is to protect the public from 

incompetence and dishonesty in those who provide building and construction services. 

[Citation.] 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. [Citation.]’ [Citations.] Section 7031, subdivision (a), applies ‘[r]egardless of 

the equities.’ [Citation.] For the past 50 years, it has been held that ‘courts may not 

resort to equitable considerations in defiance of section 7031.’ [Citation.] That is 

because the statute ‘“‘represents a legislative determination that the importance of 

deterring unlicensed persons from engaging in the contracting business outweighs any 

harshness between the parties . . . .’” [Citations omitted.]’ [Citation.]” (WSS, supra, 162

Cal.App.4th at p. 587.)

As a further deterrence to contracting to install fixtures without proper licensing, 

section 7031, subdivision (b), provides that “a person who utilizes the services of an 

 

7 Strle waived its belated argument that it is excepted from section 7031 pursuant 

to section 7052, as discussed in Steinbrenner v. J. A. Waterbury Const. Co. (1963) 212 

Cal.App.2d 661 (Steinbrenner), because it did not raise the issue in the opening brief. 

(See Campos, supra, 57 Cal.App.4th at p. 794, fn. 3.) Regardless, Steinbrenner is 

distinguishable on its facts. The case involved an unlicensed subcontractor who entered 

into an agreement with a general contractor to “furnish certain millwork such as doors, 

trim, plywood and manufactured cabinets.” (Id. at pp. 662-663.) No installation work 

was to be performed under the contract. In this case, Strle contracted to perform 

installation work, and cannot claim that it merely agreed to furnish or supply materials.
6

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.”

“A ‘contractor,’ including a corporation so acting (§ 7025), ‘for the purposes of 

this chapter, is synonymous with “builder” and, within the meaning of this chapter, a 

contractor is 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, [or] repair,’ inter alia, a structure. (§ 7026, italics 

added.)” (Opp v. St. Paul Fire & Marine Ins. Co. (2007) 154 Cal.App.4th 71, 75 (Opp).)

Analysis

Strle urges this court to consider the inequity of allowing Limbach to obtain the 

benefit of the work performed under the subcontract without providing compensation, 

arguing that the legislature’s public policy considerations have been satisfied in this case. 

The legislature has clearly stated that the protections offered by section 7031 are of such 

importance that the equities are not to be taken into consideration, no matter how harsh 

the results. We cannot substitute our judgment for that of the legislature (see Vallejo, 

supra, 24 Cal.App.4th at p. 943), and will not entertain Strle’s request that we do so here, 

despite the admittedly severe consequences. 

Regardless, both of Strle’s legal arguments have been considered and rejected in 

prior cases. (Vallejo, supra, 24 Cal.App.4th at p. 947 [section 7031 barred plaintiff’s 

cause of action where unlicensed developer contracted with licensed contractor to 

provide labor, equipment, and materials]; Opp, supra, 154 Cal.App.4th at pp. 74-75 

[section 7031 barred plaintiff’s cause of action although president of unlicensed 

contractor was individually licensed].)
7

Strle’s argument that Air Performance performed the installation work does not 

excuse it from section 7031’s licensing requirement. 8 In Vallejo, supra, 24 Cal.App.4th 

929, the “master developer” of a planned community sold land to builders to construct 

homes for sale. It agreed to make a number of infrastructure improvements after the 

close of escrow. The master developer did not have a contractor’s license, but it retained 

a licensee and licensed subcontractors to perform the infrastructure improvements. A 

dispute arose between the master developer and the purchasers with respect to whether 

the master developer had adequately provided the agreed upon improvements. In 

response to a suit filed by the purchasers, the master developer recorded mechanics’ liens 

against the properties and attempted to foreclose on the liens. The purchasers defended 

the mechanics’ lien action, arguing the master developer was acting as a contractor within 

the meaning of section 7026 and therefore was barred by section 7031 from pursuing any 

claim against them. The Court of Appeal agreed, rejecting the master developer’s 

argument that it merely acted as an administrator of the construction contracts, which 

were actually performed by licensed contractors. It held that “[t]he Legislature has 

determined that ultimate responsibility for construction work must rest with a licensed 

contractor-in this case, a licensed general engineering contractor-who has demonstrated 

the requisite competence in the construction business. This policy ensures that all 

subcontractors and materialmen on a project will be answerable to and directed by 

someone whose knowledge and experience meet uniform requirements. In addition, this 

policy protects consumers of the contractor’s services by making all persons who are 

responsible for construction projects subject to the regulatory powers of the [Contractors’

State Licensing Board].” (Vallejo, supra, 24 Cal.App.4th at p. 942.)

Similarly, in this case it is irrelevant whether Air Performance performed all or 

any of the installation work under the subcontract. Although Strle argues that its “only 

technical violation of the contractor’s license law was that Mr. Strle signed the contract 

 

8 Contrary to Strle’s assertions, the trial court declined to decide the factual issue 

of whether Air Performance performed any or all of the installation work, deeming 

resolution of the issue unnecessary to its decision. 
8

under the name of Strle Enterprises, Inc. rather that Air Performance, Inc.,” it does not 

contend that Air Performance was an intended party to the subcontract, or that Richard 

Strle mistakenly executed the subcontract on behalf of the wrong company. As the entity 

that contracted to do the installation work, Strle is ultimately responsible and must be 

licensed as required by section 7031. It is therefore barred from bringing suit for 

compensation under the subcontract. It makes no difference whether it “borrowed” 

workers from its sister company as it claims, or officially subcontracted with Air 

Performance to perform the work. In either case, Strle itself failed to obtain the proper 

licensing at any point during the installation process, and is not immune from the 

ramifications of its inaction. 

Nor does it matter that Richard Strle maintained an individual license permitting 

him to perform such installation work. In Opp, supra, 154 Cal.App.4th 71, a 

subcontractor, Mountain Connection, Inc. (MCI), sued on a payment bond. When the 

defendant asserted MCI was not a licensed contractor, MCI filed an amended complaint 

substituting as plaintiff “‘William Opp dba Mountain Connection and Mountain 

Connection, Inc.’” (Id. at p. 73.) Following summary judgment in the defendant’s favor, 

Opp argued on appeal that the trial court erred because the evidence showed he had 

placed his personal contractor’s license number on the contract, supervised most of the 

work, and the general contractor “dealt with him as a sole proprietor, doing business 

under the name of Mountain Connection, Inc.” (Id. at p. 74.) 

The appellate court rejected these arguments. It noted that section 7031 is not 

directed toward who actually “‘did the work,’ but who was ‘engaged in the business or 

acting in the capacity of a contractor.’” (Opp, supra, 154 Cal.App.4th at p. 75.) It 

concluded that the undisputed evidence revealed that MCI was the contracting party 

because William Opp signed the contract “as president of MCI.” (Id. at p. 76.) 

Accordingly, the suit was barred by section 7031. (Id. at p. 75.)

The court also rejected the suggestion that Opp could be considered a party to the 

contract simply because he used his individual license on the contract, observing: “Such 

a rule would violate at least three aspects of public policy. First, of course, it would 
9

render ineffective the contractor’s license requirement and encourage fraud if insertion of 

the license number of one who is not the contractor permitted a suit that otherwise was 

barred by section 7031. Second, in this case it would be tantamount to permitting an 

individual to adopt a prohibited fictitious business name and then to sue on a contract, 

when such suit would be barred for any other unregistered business. [Citation.] Finally, 

‘[p]arties who determine to avail themselves of the right to do business by means of the 

establishment of a corporate entity must assume the burdens thereof as well as the 

privileges.’ [Citation.] An individual who has obtained the benefits of corporate limited 

liability will not be permitted to repudiate corporate existence just because the 

corporation has become an inconvenience. [Citation.]” (Opp, supra, 154 Cal.App.4th at 

p. 76, fn. omitted.)

Strle’s arguments fail for the same reasons. It is undisputed that Richard Strle is 

not a party to this action, and did not sign the subcontract in his individual capacity, or 

intend to. Strle cannot utilize Richard Strle’s license to avoid the ramifications of 

contracting to perform installation work without a license of its own. Strle has enjoyed 

the benefits of incorporation, and must bear the responsibilities as well. The fact that its 

owner and president is duly licensed does not permit avoidance of the bar imposed by 

section 7031.
10

DISPOSITION

The judgment is affirmed. Defendant, cross-complainant, and respondent Western 

Air Limbach LP is awarded its costs on appeal. 

KRIEGLER, J. 

We concur: 

MOSK, Acting P. J.

KIRSCHNER, J. *

 

*

Judge of the Los Angeles County Superior Court, assigned by the Chief Justice 

pursuant to article VI, section 6 of the California Constitution.