Opinion ID: 1177748
Heading Depth: 2
Heading Rank: 1

Heading: the contractor registration requirement

Text: AS 08.18.011 provides, in part, that it is unlawful for a person to work as a contractor until he has been issued a certificate of registration by the Department of Commerce. A contractor is prohibited from bringing an action in the state courts for collection of compensation for the performance of work for which registration is required. [1] The registration requirement is subject to certain exceptions, however, which are set forth in AS 08.18.161. To determine whether the Act applies to Owens, we shall summarize the circumstances giving rise to his agreement with Olsen. The U.S. Forest Service awarded a timber sale contract for approximately 693 million board feet to Alaska Lumber and Pulp Co., Inc. (ALP), requiring the construction of specified logging roads on U.S. Forest Service property. Olsen entered into a subcontract with ALP to log and construct logging roads on Mitkof Island in the Tongass National Forest. Olsen in turn contracted with Owens to drill and shoot rock from a U.S. Forest Service quarry. The rock was to be furnished in place to Olsen for use on the roads. Owens also agreed to drill and shoot, to a depth as specified on plans, a section of the roadway referred to as the thru cut area. A contractor is defined in the Alaska contractor licensing statute as meaning a person who, in the pursuit of an independent business, undertakes or offers to perform, or claims to have the capacity to perform, or submits a bid for a project to construct, alter, repair, move or demolish a building, highway, road, railroad, or any type of fixed structure, including excavation and site development and erection of scaffolding.... [2] Olsen contends that because Owens agreed to drill and shoot the thru cut area of the road he was engaging in the construction of the road. The trial court concluded that Owens was merely a materialman furnishing rock and thus was not a contractor under the terms of the Act. One who merely furnishes material to an owner or contractor is generally not a contractor under statutes similar to Alaska's licensing act. [3] In any event, AS 08.18.161(8) exempts from the requirements of the Act a person who only furnished materials, supplies or equipment without fabricating them into, or consuming them in the performance of, the work of the contractor. We shall not resolve the question of whether Owens is a contractor since we believe that even if Owens may be considered to be a contractor, his work is otherwise exempted from the coverage of the Act. AS 08.18.161(7) exempts construction carried on within the boundaries of a site under the legal jurisdiction of the federal government, and subsection (14) exempts a person performing construction work incidental to logging. [4] There would appear to be no question that Owens' work comes under the literal language of those exemptions. It is undisputed that the road construction was required under ALP's contract with the U.S. Forest Service and thus may be regarded as a federal project. Moreover, the work was supervised by the U.S. Forest Service, and took place on federal land. Moreover, the basic contract was for the sale of timber which was to be logged. The road construction, while possibly serving other purposes, was incidental to the logging contract. The manner in which exemptions have been construed under similar licensing statutes is illustrated by Martinson v. Publishers Forest Products Co., 11 Wash. App.2d 42, 521 P.2d 233 (1974). In that case, the plaintiff entered into an agreement to log timber and to repair and construct access roads. Plaintiff sued for sums allegedly due, and one defense was that plaintiff was not licensed as a contractor in accordance with the requirement of a Washington statute, which made compliance a prerequisite to maintaining an action. The Washington statute contained an exemption, RCW 18.27.090(10), for construction or operation incidental to clearing or other work upon land in rural districts for fire protection purposes. The court stated: The logging engineer for the defendant testified that the purpose of the spur roads and of the logging roads once the logging was completed was for fire protection and management of the new stand. He further testified that some of the spur roads would be kept open for 4-wheel vehicles for fire protection after the spur roads were no longer used for logging. The primary purpose of the construction of the roads was for logging access, but an important incidental purpose was fire prevention. The plaintiff was not required to register under RCW 18.27. [5] It would appear that the connection of the work performed by Owens to logging is less tenuous than that of Martinson to fire protection. In Sumner Development Corp. v. Shivers, 517 P.2d 757 (Alaska 1974), we discussed the applicable considerations in applying the contractor licensing provisions: Statutes which cause forfeitures are not favored. Where a bar to legal action is not mandated we approach the case from our own view of intelligent policy and with the thought of doing justice between the parties. Here, however, the legislature chose the closing of the doors of the courts as a fundamental tool to enforce its policy of ensuring competence and financial responsibility in those who undertake work as contractors. We are bound to enforce the legislative policies as we find them expressed in AS 08.18.011 et seq. [6] While we will not engraft equitable exceptions to the licensing requirements, [7] we see no reason why the statute should be given strained constructions as urged by Olsen. We hold that Owens was exempted from the registration requirements of the statute.