Opinion
E047906 Super.Ct.No. SCVSS140537
09-29-2011
BUNNY BOWERS et al., Plaintiffs and Respondents, v. DARWIN WEIS, Defendant and Appellant.
Gregory W. Brittain; and Darwin Weis, in pro. per., for Defendant and Appellant. Mitchell Reed Sussman for Plaintiffs and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
OPINION
APPEAL from the Superior Court of San Bernardino County. Christopher J. Warner, Judge. Affirmed.
Gregory W. Brittain; and Darwin Weis, in pro. per., for Defendant and Appellant.
Mitchell Reed Sussman for Plaintiffs and Respondents.
Darwin Weis, the defendant, appeals from a judgment following a court trial awarding money damages to Bunny Bowers (Bowers) in the net amount of $130,203.79 for construction expenses she advanced to defendant, and a judgment quieting title to two lots in favor of 33043 Rim of the World, LLC (Rim). Defendant, an unlicensed contractor, entered into an oral agreement with Bowers to build two houses which would be sold and the proceeds divided. Bowers eventually quitclaimed title to the defendant to facilitate completion, but defendant never completed the project. Bowers then contracted with Rim to complete the construction, transferring title to Rim for $110,000. Rim recorded the grant deeds after confirming that defendant had not recorded the earlier quitclaim deeds. Defendant later recorded his quitclaim deeds. Bowers then sued for money owed on a promissory note executed by defendant, and Rim sued to quiet title. The trial court judgment in favor of both Bowers and Rim was based on Business and Professions Code section 7031, precluding recovery by unlicensed contractors.
On appeal, defendant argues that the oral agreement with Bowers created either a partnership or joint venture, which precluded application of Business and Professions Code section 7031. He also challenges the denial of his pretrial motion for leave to amend his cross-complaint, and argues that the motion for new trial, based on his trial attorney's waiver of his right to a jury trial, was erroneously denied. We affirm.
BACKGROUND
In 2001, Bowers purchased two undeveloped lots in Arrowbear, California from defendant. Bowers and defendant verbally agreed that Bowers would put up the money and defendant, an unlicensed contractor, would oversee and construct houses on each of the two lots; they would sell the houses and split the profits. On July 10, 2003, a building permit was issued to Bowers for the construction at 33043 Rim of the World Drive. By December 2004, Bowers had advanced $205,095 in construction expenses toward construction of the houses, but the project was not completed.
Defendant told Bowers he did not have the money to finish the project and needed a construction loan. Defendant also represented to Bowers that he needed to have title to the lots in his name so he could obtain a construction loan to finish up the project. Thus, Bowers and defendant entered into a new oral agreement whereby defendant agreed to complete the construction of one house, which would be sold and the proceeds would be used to repay Bowers for the expenses paid, plus $15,000 per lot. Under the new oral agreement, Bowers agreed to quitclaim the property to defendant and he would sign a promissory note for what the lots were worth, plus the payments Bowers had made, for a total of $235,095. On July 22, 2005, defendant executed the promissory note in the amount of $235,095 to be paid in a lump sum upon the sale of the first house. Bowers quitclaimed title for the two lots to defendant.
Defendant did not promptly record the deeds, and did not perform any construction work after receiving Bowers' last payment in December 2004. The building permit and job card expired due to lack of progress. Although Bowers had advanced $205,095 toward the construction budget for construction expenses up to this point, defendant had receipts for only $74,891.26 representing sums actually spent on the project. Bowers needed help to complete the house because she did not have the money to do so, so she arranged for Rim to complete the construction of the house. Rim did a title search before Bowers transferred title to the two lots to Rim to complete the project. Rim recorded the grant deeds on November 4, 2005, and expended an additional $110,000 to complete construction of the house. Subsequently, defendant recorded his quitclaim deeds on April 4, 2006.
On August 3, 2006, Bowers filed a complaint against defendant alleging three causes of action: (1) Breach of Contract; (2) Money Had and Received; and (3) Fraud. That same day, Rim filed a complaint against defendant alleging a cause of action to Quiet Title to the two parcels that were the subject of the construction project. These actions were consolidated by stipulation. Defendant cross-complained for (a) Specific Performance; (b) Breach of Contract; (c) Interference with Contract; (d) Trespass; (e) Ejectment; (f) Unfair Business Practices; (g) Declaratory Relief; and (h) Quiet Title.
On November 25, 2008, the parties appeared for trial and waived jury. At the end of the proceedings, the court took the matter under submission. On December 1, 2008, the court issued a minute order ruling on the submitted matter. The court found Bowers was entitled to recover $205,095 from defendant based on the provisions of Business and Professions Code section 7031 and not based on her causes of action. The court also determined that the quitclaim deeds in favor of defendant were unenforceable as they represented compensation for his services as a contractor, which he was ineligible to receive under Business and Professions Code section 7031. Finally, the court ruled that title to the two lots must be quieted in favor of Rim.
Defendant objected to the proposed judgment. On December 15, 2008, following a hearing, the court sustained defendant's objection to the amount of monetary damages awarded to Bowers, offsetting the amount of expenditures applied by defendant to the house construction. Judgment was entered on December 15, 2008, awarding monetary damages to Bowers in the amount of $130,203.79, and ordered title to the two lots quieted in favor of Rim. The judgment further determined that the quitclaim deeds transferring title to defendant were of no force or effect, and awarded costs of suit to both Bowers and Rim.
On December 30, 2008, defendant made a motion for new trial on multiple grounds, the most significant of which were that the implied finding of a partnership or joint venture between Bowers and defendant precluded application of the provisions of Business and Professions Code section 7031. The motion was heard and denied on February 9, 2009. On March 11, 2009, defendant appealed.
DISCUSSION
a. The Trial Court Correctly Ordered Bowers Was Entitled to Recover Compensation Paid to Defendant, an Unlicensed Contractor.
In separate assignments of error, defendant argues that the trial court incorrectly applied the provisions of Business and Professions Code section 7031, to the provisions of the initial verbal agreement of 2001 and to the second agreement of 2005. We disagree. In analyzing defendant's assertions, we observe that the trial court did not parse the lengthy business relationship of Bowers and defendant into discrete contracts for purposes of applying section 7031. We also note that defendant's own position—both in his pleadings and in his testimony at trial—was that the 2005 verbal agreement superseded the 2001 contract. Thus, we limit our review to the more recent transaction, memorialized in part by a promissory note, and conclude the trial court properly applied the provisions of Business and Professions Code section 7031.
In relevant part, section 7031 provides that no person engaged in the business of a contractor may bring or maintain any action or recover in law or equity in any action for the collection of compensation for the performance of any act or contract where a license is required. (Bus. & Prof. Code, § 7031, subd. (a).) A contractor is any person who undertakes to construct any structure, project, development, or improvement, and the term includes subcontractors and specialty contractors. (Bus. & Prof. Code, § 7026.) Moreover, a person who utilizes the services of an unlicensed contractor may bring an action to recover all compensation paid to the unlicensed contractor. (Bus. & Prof. Code, § 7031, subd. (b).)
Business and Professions Code section 7031 withholds judicial aid from those who seek compensation for unlicensed contract work, despite any injustice to the unlicensed contractor. (Hydrotech Systems, Ltd. v. Oasis Waterpark (1991) 52 Cal.3d 988, 995; see also MW Erectors, Inc. v. Niederhauser Ornamental & Metal Works Co., Inc. (2005) 36 Cal.4th 412, 423, 444 [subcontractor not barred from recovering compensation if licensed during performance, although unlicensed when contract executed].) This includes all actions, however characterized. (Hydrotech, at p. 997.)
The prohibitory provisions of section 7031 do not apply to an unlicensed person who builds on his own property (Bus. & Prof. Code, § 7044, subd, (a)(1)), and does not prohibit a party to a joint venture from instituting proceedings for dissolution of the joint venture and an accounting. (See Epstein v. Stahl (1959) 176 Cal.App.2d 53, 59.) However, a joint venture license is required with contracts involving any such combination of individuals, corporations, limited liability companies, partnerships, or other joint ventures, each of which is required to hold a current, active license in good standing. (Bus. & Prof. Code, § 7029.)
Defendant argues at length that the parties were engaged in a joint venture. There are three basic elements of a joint venture: (a) the members must have joint control over the venture (even though they may delegate it); (b) they must share the profits of the undertaking; and (c) the members must each have an ownership interest in the enterprise. (Scottsdale Inc. Co. v. Essex Ins. Co. (2002) 98 Cal.App.4th 86, 91, citing Orosco v. Sun-Diamond Corp. (1997) 51 Cal.App.4th 1659, 1666.) "'An agreement by a landowner to share with another profits to be derived from the sale of land does not, without more, create a partnership or joint venture relationship. [Citations.]' [Citation.]" (Kaljian v. Menezes (1995) 36 Cal.App.4th 573, 586.) Here, defendant did not establish at trial that he had an ownership interest in the enterprise under the terms of the 2001 agreement. There was never a joint venture. Nor was there a joint venture license, as required by Business and Professions Code section 7029.
Even if a joint venture had been established, it would not provide relief to defendant. The authority relied upon by defendant only permits an unlicensed contractor who is involved in a joint venture to institute proceedings to dissolve the joint venture and obtain an accounting. (Epstein v. Stahl, supra, 176 Cal.App.2d at p. 59; see also Norwood v. Judd (1949) 93 Cal.App.2d 276, 283-284 [claim for accounting of assets and profits of business, unrelated to construction, could be maintained].) Defendant has cited no authority permitting him to maintain an action for relief under a void contract for construction by an unlicensed contractor.
Because the basis for both oral agreements was for defendant to construct houses on two lots, the performance of which required a contractor's license, defendant's characterization of the parties' relationship as a joint venture or partnership does not preclude application of section 7031.
b. Denial of Motion for Leave to File an Amended Cross-Complaint Was Proper.
Defendant argues the trial court erred in denying his motion for leave to amend his cross-complaint to add a cause of action for breach of the 2001 oral contract for the construction of two houses. We disagree.
First, as discussed ante, section 7031, subdivision (a), of the Business and Professions Code precludes an unlicensed contractor from bringing or maintaining any action in any court for the collection of compensation for the performance of any act or contract where a license is required. Defendant's proposed additional cause of action seeks compensation for breach of contract under a construction agreement for which defendant was required to hold a license. Because he was prohibited from bringing or maintaining an action under either agreement pursuant to Business and Professions Code section 7031, the trial court properly denied defendant leave to amend his cross-complaint to add an additional prohibited cause of action.
Even if Business and Professions Code section 7031 were held to be inapplicable, denial of leave to amend the complaint was proper because any action based on the 2001 oral agreement was barred by the two-year statute of limitations. (Code Civ. Proc., § 339, subd. (1).) There was no error.
c. Waiver of Jury By Counsel Does Not Compel Reversal Where Defendant Was Present and Failed to Object.
Defendant argues that the trial court erroneously denied his new trial motion where his trial attorney waived his right to a jury trial without his express consent. Because this was a civil trial, and because defendant acquiesced in the nonjury trial, there was no error.
Defendant cites provisions of the Seventh Amendment of the United States Constitution, as well as article I, section 16 of the California Constitution in support of his position, but cites no authority to support the proposition that his trial attorney was not authorized to waive jury on his behalf. We acknowledge that defendant had a constitutional right to a trial by jury. (U.S. Const., 7th Amend.; Cal. Const., art. I, § 16; Code Civ. Proc., § 631, subd. (a).) The California constitutional right to a jury trial may be waived in several ways, including, but not limited to (1) failing to appear at the trial; (2) written consent filed with the court; (3) oral consent, in open court, entered in the minutes; or (4) failing to announce that a jury is required at the time the cause is first set for trial, among other ways.
Interpreting the guarantee provided under California law, it has been held that trial counsel is authorized to exercise his independent judgment with respect to strategic litigation decisions. (Cadle Co. v. World Wide Hospitality Furniture, Inc. (2006) 144 Cal.App.4th 504, 510.) Trial counsel has authority to bind his client to a waiver of trial by jury. (Code Civ. Proc., § 283, subd. (1) [authority to bind client in any of the steps of an action]; Conservatorship of Maldonado (1985) 173 Cal.App.3d 144, 148.)
Acquiescence in an attorney's waiver of jury trial constitutes evidence of express consent to a jury trial waiver within the meaning of Code of Civil Procedure section 631. (Taylor v. Union Pac. R.R. Corp. (1976) 16 Cal.3d 893, 900; see also Cadle Co. v. World Wide Hospitality Furniture, Inc., supra, 144 Cal.App.4th at pp. 510-511.) Acquiescence, or the participation in a bench trial without objection, also constitutes a waiver of the federal constitutional right. (Palmer v. Valdez (9th Cir. 2009) 560 F.3d 965, 968; Preferred RX v. American Prescription Plan (6th Cir. 1995) 46 F.3d 535, 548-549; White v. McGinnis (9th Cir. 1990) 903 F.2d 699, 703.)
Here, at the commencement of the trial, the court announced that both sides had waived jury. Subsequently, defendant participated in the bench trial without objection. He therefore waived his right to a trial by jury. The trial court did not err in denying defendant's motion for new trial.
DISPOSITION
The judgment is affirmed. Bowers and Rim are awarded costs on appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
RamirezP.J. We concur:
McKinster J.
Codrington J.