Opinion
NOT TO BE PUBLISHED
APPEAL from the Superior Court No. BBCHS00650 of San Bernardino County. Christopher J. Warner, Judge.
Gordon & Rees, William M. Rathbone and Timothy K. Branson for Plaintiffs, Cross-defendants and Appellants.
Sheppard, Mullin, Richter & Hampton, John A. Yacovelle and Matthew W. Holder for Defendant, Cross-complainant and Respondent.
OPINION
Ramirez P.J.
Plaintiff Richard J. Maraziti, doing business as Signature Log Homes, LLC, (Signature) sued Defendant David A. Stone, Jr., and eventually Stone’s alter egos, for various causes of action relating to the breach of a contract to construct five log homes on Stone’s property. In 2003, demurrers were sustained without leave to amend dismissing the bulk of the action against Stone’s alter egos on the ground that Maraziti and Signature had no contractor’s license. (Bus. & Prof. Code, § 7031.) As to Stone personally, a motion for judgment on the pleadings was granted on the ground the action was barred due to the same lack of contractor’s license.
All further statutory references are to the Business and Professions Code unless otherwise indicated.
We previously affirmed the order sustaining the demurrers without leave to amend and dismissal as to Stone’s alter egos. In 2008, following a bench trial on Stone’s cross-complaint against Maraziti, the trial court entered a judgment in favor of Maraziti. Thereafter, Maraziti appealed from the 2004 order granting Stone’s motion for judgment on the pleadings. We affirm.
Case No. E037334.
BACKGROUND
In a first amended complaint filed against defendant Stone and his alter egos on May 4, 2004, Maraziti alleged causes of action for breach of written, oral, and implied contract (First, Second, and Third causes of action); fraud (Fourth cause of action); breach of the covenant of good faith and fair dealing (Fifth cause of action); breach of fiduciary duty (Sixth cause of action); equitable, implied, expressed and contractual indemnity; total indemnity and contribution (Seventh cause of action); slander and slander per se (Ninth cause of action); intentional or negligent infliction of emotional distress (Tenth cause of action); money had and received (Eleventh cause of action); accounting and for appointment of a receiver (Twelfth cause of action). All causes of action arose from the same set of facts, summarized in the amended complaint as follows:
In 2000, Signature began marketing and selling log home packages in Big Bear Lake. That same year, defendant Stone purchased several unimproved lots for the purpose of building homes and selling them. To this end, Stone contracted with Signature to construct log homes on the property he owned.
On August 24, 2000, Signature, through Maraziti, and Stone entered into a joint venture agreement for the construction of five log homes. The written contract, which allegedly formed the basis of the joint venture, provided that Signature would construct the log packages for five sites at its standard rates, not to exceed $45 per square foot. Stone would execute a “standard log package contract” for each log package, which provided for payment of $110,000 plus tax as follows: 25 percent of the log package as a deposit, 50 percent at the “fifth round” of the log cabin, and the balance upon completion of the headers. Signature would construct the log package in Canada, provide logs, labor and materials, and would coordinate the design of the plans for construction, although Stone had final determination of which plans to construct.
It is not clear that there was a true joint venture here. A joint venture is an undertaking of two or more people jointly to carry out a single business enterprise for profit. (Nelson v. Abraham (1947) 29 Cal.2d 745, 749.) Under California law, a joint venture must consist of: (1) the right of joint control over the venture (even though the members may delegate it); (2) sharing of profits and losses; and (3) an ownership interest in the enterprise. (Scottsdale Ins. Co. v. Essex Ins. Co. (2002) 98 Cal.App.4th 86, 91; Orosco v. Sun-Diamond Corp. (1997) 51 Cal.App.4th 1659, 1666; April Enterprises, Inc. v. KTTV (1983) 147 Cal.App.3d 805, 819.) The amended complaint alleges contract terms that include the sharing of profits, but none of the other elements appear to be present.
The agreement further provided that Signature would provide the general contracting for the five sites, and would coordinate all matters relating to the construction, including but not limited to survey, engineering, architect, plan check, transportation of the log package, crane, re-erection, and construction at the site including but not limited to grading, foundation, electrical, plumbing, framing, roofing, finish work, and landscaping. Additionally, the parties agreed that Stone would be responsible for all costs of construction. In addition to the compensation for construction work, Stone agreed to pay Signature a fee equal to 10 percent of the cost, and 50 percent of the profits from the sale of the property.
The amended complaint alleged the existence of other contracts that “slightly” changed the terms of the original agreement. One less slight change was the alleged agreement between Stone and one of Stone’s entities, Encompass/Tri State Electric, for the provision of general contracting services. However, Maraziti was not a party to this agreement and his complaint does not allege that Encompass performed any construction work.
Knowing that neither Maraziti nor Signature was a licensed contractor, Stone authorized plaintiffs to submit plans and pull permits on his behalf, as owner/builder. When Stone found himself short of funds, Maraziti agreed to forward his own money for the log packages. Maraziti advanced other funds to continue the construction on the lots with the understanding that Stone would repay the money. In September 2001, construction of the third log cabin package began and Stone agreed to purchase the log package at a cost of $140,000.
However, the following month, Stone breached the agreement by (1) failing to repay the approximately $400,000 advanced by plaintiffs; (2) failing to pay $140,000 for the third log package; (3) refusing to allow Signature the right to approve the sales price of the properties; (4) failing to account to and pay Signature 50 percent of the profit on the sale of the properties; and (5) failing to perform as to the remaining undeveloped lots. Plaintiffs performed fully under the contract and all oral modifications. (First cause of action.)
Based on this course of conduct, Stone breached the covenant of good faith and fair dealing and the oral agreements (second cause of action.) as well as implied agreements. (Third cause of action.) Further, because Stone never intended to pay plaintiffs, or honor his agreements, and because he manufactured correspondence and records to create the impression he thought plaintiffs were licensed general contractors, he fraudulently misrepresented he would pay plaintiffs for their performance under the agreement and sought punitive damages. (Fourth cause of action.) Because joint venturers are entitled to indemnification by other joint venturers, Stone breached an equitable, implied, expressed and contractual indemnity agreement by failing to perform under the contracts. (Fifth cause of action.) Because of the alleged joint venture existing between plaintiffs and Stone under the agreements, Stone also breached his fiduciary duty. (Sixth cause of action.)
Before defendant breached the agreements, numerous third parties supplied labor, materials, rental equipment and services for the benefit of defendant, but defendant did not pay them. Plaintiffs sought indemnification in the approximate amount of $800,000. (Seventh cause of action.) Under the joint venture agreement, plaintiffs advanced costs in excess of $300,000 which directly benefitted defendants, entitling plaintiffs to recovery for money had and received. (Eleventh cause of action.) Because defendants wrongfully took over the project to the exclusion of plaintiffs, they made profits in connection with property requiring an accounting and distribution of the profits by way of a receiver. (Twelfth cause of action.)
On June 10, 2004, Stone answered the First Amended Complaint, and the following month he filed a motion for judgment on the pleadings as to the First, Second, Third, Fourth, Fifth, Sixth, Seventh, Eleventh and Twelfth Causes of Action. The basis for the motion was that plaintiffs’ lack of contractor’s licenses barred recovery arising from construction services provided under the agreement. (§ 7031.) Plaintiffs opposed the motion asserting that because a joint venture had been alleged in the amended complaint, they were owner/builders who were exempt from the bar of section 7031. (§ 7044.)
Defendant filed a special motion to strike (Code of Civ. Proc. § 425.16) as to two paragraphs of the fourth cause of action, as well as the entirety of the eighth, ninth, and tenth causes of action. That motion was not opposed and those causes of action were ordered stricken pursuant to Code of Civil Procedure, section 425.16 on September 16, 2004. This appeal is limited to the granting of the motion for judgment on the pleadings, so we do not discuss the other proceedings.
On November 3, 2004, the trial court signed an order granting Stone’s motion for judgment on the pleadings, and denied leave to amend. Following a court trial on defendant Stone’s cross-complaint, plaintiffs appealed.
Maraziti initially appealed the order on the motion for judgment on the pleadings when it appealed from the dismissal with prejudice and without leave to amend following the order granting the demurrer by defendant’s alter egos. However, with respect to the order granting the motion for judgment on the pleadings, we dismissed the appeal as premature under the one final judgment rule. (Case No. E037334, typed opn., p. 2, fn. 1.)
DISCUSSION
Plaintiffs challenge the order granting the motion for judgment on the pleadings. They contend that (1) because the complaint alleged a joint venture, they may recover for breach of fiduciary duty, dissolution and accounting; (2) they are not barred from recovery for lack of a contractor’s license because owner/builders are exempt (§ 7044); (3) Signature was an agent for Encompass, hired to be the licensed general contractor; (4) recovery is not barred for materials not consumed in construction (§ 7052); and (5) recovery is not barred for $300,000 loaned by Signature to defendants under severable oral agreements. Plaintiffs also raise ancillary claims, some of which relate to matters decided subsequent to the order granting the motion for judgment on the pleadings. We disagree with plaintiffs’ contentions.
a. Motion for Judgment on the Pleadings; Standard and Scope of Review
A motion for judgment on the pleadings may be granted if the complaint does not state facts sufficient to constitute a cause of action against defendant. (Code Civ. Proc. § 438, subd. (c)(1)(B)(ii).) “‘[The] motion for judgment on the pleadings performs the same function as a general demurrer, and [thus] attacks only defects disclosed on the face of the pleadings or by matters that can be judicially noticed. [Citations.]’ [Citation.]” (Burnett v. Chimney Sweep (2004) 123 Cal.App.4th 1057, 1064-1065.) “The task of [the] court is to determine whether the complaint states a cause of action [and] all facts alleged in the complaint are deemed admitted....” (Lance Camper Mfg. Corp. v. Republic Indem. Co. of America (1996) 44 Cal.App.4th 194, 198.)
The standard of review in a motion for judgment on the pleadings is well settled: review of the motion is confined to the face of the pleading under attack, and all facts alleged in the complaint must be accepted as true. (Rangel v. Interinsurance Exchange (1992) 4 Cal.4th 1, 7, citing April Enterprises, Inc. v. KTTV (1983) 147 Cal.App.3d 805, 815.) We may also consider matters subject to judicial notice. (Buesa v. City of Los Angeles (2009) 177 Cal.App.4th 1537, 1543.) However, consideration of extrinsic evidence is not proper. (Cloud v. Northrop Grumman Corp. (1998) 67 Cal.App.4th 995, 999.) Further, we “will not consider evidence arising after the trial court ruling, involving facts open to controversy which were not placed in issue or resolved by the trial court.” (BGJ Associates v. Superior Court (1999) 75 Cal.App.4th 952, 958.) “‘We review the correctness of the trial court’s ruling at the time it was made [and] not by reference to evidence produced at a later date.’ [Citation.]” (Shopoff & Cavallo LLP v. Hyon (2008) 167 Cal.App.4th 1489, 1511, fn. 16, citing People v. Welch (1999) 20 Cal.4th 701, 739.)
We recognize that evidence adduced in the 2008 trial of Stone’s cross-complaint revealed that Stone exploited Maraziti and Signature, knowing they lacked a contractor’s license. However, it is not relevant to the matter before us.
Additionally, “‘[w]e ignore allegations of conclusion of law, and where the allegations in the body of the complaint are contrary to documents incorporated by reference in it, we treat the documents as controlling over their characterization in the pleading.’ [Citation.]” (Executive Landscape Corp. v. San Vicente Country Villas IV Assn. (1983) 145 Cal.App.3d 496, 499.) “We review an order granting judgment on the pleadings independently.” (Howard Jarvis Taxpayers Assn. v. City of Riverside (1999) 73 Cal.App.4th 679, 685 [Fourth Dist., Div. Two].) We will now apply these standards to the issues on appeal.
b. Litigation Bar for Actions Seeking Compensation by an Unlicensed Contractor.
It is not disputed that neither Maraziti nor Signature was licensed contractors. The Contractors’ State License Law (CSLL) (§ 7000, et seq.) declares 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, except that this prohibition shall not apply to contractors who are each individually licensed under this chapter but who fail to comply with Section 7029.” (§ 7031, subd. (a).)
“The licensing requirement and the penalties for violating that requirement are designed to protect the public from incompetent or dishonest providers of building [] construction services.” (White v. Cridlebaugh (2009) 178 Cal.App.4th 506, 517, citing Hydrotech Systems, Ltd. v. Oasis Waterpark (1991) 52 Cal.3d 988, 995.) “‘Where applicable, section 7031[, subdivision (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.’ [Citation.]” (White v. Cridlebaugh, supra, 178 Cal.App.4th at p. 518, citing MW Erectors, Inc. v. Niederhauser Ornamental & Metal Works Co., Inc. (2005) 36 Cal.4th 412, 419.)
Previously, it had been held that the licensing law was not a bar to certain forms of recovery by unlicensed contractors. (See Holland v. Morse Diesel Internat., Inc. (2001) 86 Cal.App.4th 1443, 1453, discussed in White v. Cridlebaugh, supra, 178 Cal.App.4th at p. 521.) However, the 2003 amendment to section 7031 abrogated those principles, “at least to the extent they suggest claims for offset can be asserted defensively to reduce or defeat a claim for reimbursement of compensation paid. [Citation].” (White, at p. 521.) Under the current statute, in effect at the time of these proceedings, not only is a party prohibited from seeking compensation for unlicensed construction work, he or she may be forced to repay all compensation paid to the person who utilized the unlicensed services. (§ 7031, subd. (b).) Thus, cases permitting an unlicensed contractor to assert a setoff based on a contract for building services, notwithstanding the unenforceability of the contract due to lack of a license (see Ranchwood Communities Limited Partnership v. Jim Beat Construction Co. (1996) 49 Cal.App.4th 1397, 1411), cannot be extended to reimbursement claims under section 7031, subdivision (b).
Section 7031 bars all actions, however they are characterized, which effectively seek “compensation” for illegal unlicensed contract work, either for the agreed contract price or for the reasonable value of labor and materials. (UDC-Universal Development, L.P. v. CH2M Hill (2010) 181 Cal.App.4th 10, 25, citing Hydrotech Systems, Ltd. v. Oasis Waterpark, supra, 52 Cal.3d at p. 997.) Nevertheless, “‘causes of action that do not seek “the collection of compensation for the performance of any act or contract for which a license is required” are beyond the scope of Business and Professions Code section 7031.’ [Citations.]” (UDC-Universal, at p. 26 [indemnity for damages incurred for engineering defects was not a claim for compensation for services]; see also Davis Co. v. Superior Court (1969) 1 Cal.App.3d 156, 159 [unlicensed subcontractor’s breach of warranty claim against seller of defective materials were not barred by CSLL].) We must therefore determine whether the causes of action dismissed by the trial court sought “compensation for the performance of any act or contract [for which] a license is required.” (§ 7031, subd. (a).)
Every single cause of action involved here-even the claims for indemnity, breach of fiduciary duty and accounting-alleges that the duty to pay on the part of Stone, and the correlative right to recover by plaintiffs, arose from the contract between the parties for construction of the log homes. The written contract that forms the basis for the first cause of action expressly provides that plaintiffs will perform construction services in return for compensation. What plaintiffs now refer to as “loans” were alleged to be oral agreements modifying the written contract, by which plaintiffs would advance certain construction costs that defendant was otherwise obligated to pay under the written agreement, “to continue the project.” “Loan repayment” is actually compensation for costs under the construction contract.
The implied contract cause of action allegedly arose from defendant’s breach of, and plaintiffs’ reliance on, the promises made in the written and oral agreements. The fraud claim expressly arises from the joint venture agreement. The breach of the covenant of good faith and fair dealing relates to defendant’s prevention of plaintiffs’ enjoyment of the “benefits and fruits of the agreements.” The claim for breach of fiduciary duty arises from the fact plaintiffs and defendant “were joint venture partners under the agreements and had a fiduciary relationship to each other.” (Italics added.) The right to indemnity is alleged in the complaint to arise from the written agreement. The claim for money had and received alleged that plaintiffs advanced substantial costs under the joint venture agreement. The cause of action for accounting flows from the alleged joint venture established by the written contract, which entitled plaintiffs to net profits from the sale of homes as an additional item of compensation. Each of these causes of action referred to the general paragraphs at the beginning of the complaint, including paragraphs 21-24 which incorporated the terms of the written construction contract.
There is little question that all the causes of action related to claims for compensation under the agreement, which provided that Signature would “provide the general contracting for the five sites” and “coordinate all matters relating to the construction.” It is undisputed that the complaint does not allege that either Maraziti or Signature had a contractor’s license. To the contrary, the complaint asserts defendants knew that neither Maraziti nor Signature were licensed general contractors. Because all the causes of action in the complaint refer to plaintiffs’ entitlement to compensation under a written construction contract, as modified by various subsequent oral agreements or promises, unless plaintiffs fall within the exception to the license requirement for owners (§ 7044), they are barred from recovery under any theory alleged in their complaint.
c. Exception to License Requirement for Owner/Builder and Effect of Joint Venture
The complaint alleges that the parties were engaged in a joint venture. In opposition to the motion for judgment on the pleadings, and on appeal, plaintiffs assert that this status exempted plaintiffs from the litigation bar of the licensing statutes because the existence of the joint venture qualified plaintiffs as owner/builders, within the meaning of section 7044. We must therefore examine the nature of the alleged joint venture.
“A joint venture [(or joint enterprise)] is ‘an undertaking by two or more persons jointly to carry out a single business enterprise for profit. [Citations.]’ [Citation.]” (Weiner v. Fleischman (1991) 54 Cal.3d 476, 482.) It is comprised of three basic elements: (1) the members must have joint control over the venture (although it may be delegated), (2) they must share the profits of the undertaking, and (3) the members must each have an ownership interest in the enterprise. (Jeld-Wen, Inc. v. Superior Court (Keener) (2005) 131 Cal.App.4th 853, 872, citing Orosco v. Sun-Diamond Corp. (1997) 51 Cal.App.4th 1659, 1666.) “A joint venture resembles a partnership in that its members associate as co-owners of a business enterprise, agreeing to share profits and losses.” (Rickless v. Temple (1970) 4 Cal.App.3d 869, 893.) “However, a partnership ordinarily engages in a continuing business for an indefinite or fixed period of time, while a joint venture is ordinarily formed for a single transaction or single series of transactions, thus being more limited in both scope and duration. [Citation.]” (Ibid.)
The written contract (which was incorporated by reference into the complaint) did not refer directly to a joint venture, or expressly provide for joint control over the venture, or an ownership interest in the enterprise, so we cannot assume the written agreement was sufficient to establish a joint venture between plaintiffs and defendant. “‘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.) Nor does the allegation that the contract created a joint venture convert a contractor into an owner of property without an expression of that intent and an instrument in writing, subscribed by the party disposing of the estate in real property. (Civ. Code, § 1091.)
The existence or nonexistence of a joint venture is a question of fact for the jury to resolve. (Kaljian v. Menezes, supra, 36 Cal.App.4th at p. 586.) On a motion for judgment on the pleadings, all properly pleaded facts are deemed true, “but not contentions, deductions, or conclusions of fact or law.” (Kapsimallis v. Allstate Insurance Co. (2002) 104 Cal.App.4th 667, 672.) The allegation in the complaint that the contract established a joint venture is merely a conclusion of fact or a contention, so we may not consider it as true for purposes of reviewing the correctness of the judgment on the pleadings. However, even if we could deem that allegation true, the existence of a joint venture does not necessarily make plaintiffs owners of the property on which the log homes were to be constructed.
Section 7044 of the CSLL provides that the prohibition against an unlicensed contractor from bringing or maintaining an action to recover compensation do not apply to (a) an owner of property, building or improving structures thereon, who does the work himself or herself or through his or her own employees with wages as their sole compensation, provided none of the structures are intended or offered for sale; or (b) an owner of property, building or improving structures thereof, who contracts for such a project with a subcontractor or subcontractors thereon; or (c) a homeowner improving his or her principal place of residence, providing that (1) the work is performed prior to sale; (2) the homeowner has actually resided in the residence for the 12 months prior to completion of the work; and (3) the homeowner has not availed himself or herself of the exemption on more than two structures more than once during any three year period. (§ 7044 [prior to the 2009 amendments].)
The contractor’s licensing provisions thus do not apply to any person who erects a building on his own property (People v. Moss (1939) 33 Cal.App.2d Supp. 763, 766), or to those engaged in activities as an employee of the homeowner, who received wages as his sole compensation. (§ 7053; Sanders Construction Co., Inc. v. Cerda (2009) 175 Cal.App.4th 430, 436; see also Pickens v. American Mortg. Exchange (1969) 269 Cal.App.2d 299, 305.)
A contractor is a builder, and the term includes subcontractors and specialty subcontractors. (§ 7026.) The complaint alleged that the lots or sites on which the log homes were to be constructed were owned by defendant. Although the complaint alleged Stone authorized plaintiffs to submit plans and pull permits on his behalf as owner/builder, it also alleged that Stone owned the property, not plaintiffs and not the joint venture. The trial court properly concluded the exemption from the licensing requirement for owners did not apply because plaintiffs were not owners.
Plaintiffs’ contentions that because the work was performed by licensed subcontractors and licensed contractors within the meaning of section 7044, they are entitled to recovery fails for the same reason: the complaint alleges Stone owned the property, not plaintiffs, and, as we have observed, the fact Stone agreed to share the profits from selling the log homes constructed by plaintiffs does not establish the existence of an owner/builder exception for a license.
d. Other Contentions
(1) Plaintiff asserts that the trial court failed to assume the alleged facts as true or to liberally construe the allegations of in favor of plaintiffs. We disagree. Whether or not there was a joint venture, all of the theories presented in the complaint allege the existence of an agreement to construct log homes on defendant’s property as the basis for plaintiffs’ rights of recovery. Under even the most liberal construction, plaintiffs are prohibited from seeking compensation for construction services having performed those services without the requisite license.
(2) Plaintiffs also assert that due to the existence of a joint venture, plaintiffs are entitled to recover for breach of fiduciary duty, dissolution and accounting. Plaintiff places heavy reliance on the holdings of Epstein v. Stahl (1959) 176 Cal.App.2d 53, and Norwood v. Judd (1949) 93 Cal.App.2d 276. Those decisions are inapposite. Epstein involved a joint venturer’s claim for accounting for money received and disbursements made in connection with the operation of buildings that had been constructed. The claim for relief was not for compensation for construction services, but for an accounting of profits from the operation of a joint venture contracting business. (Epstein, at p. 60.) The assets of the joint venture in that case included the rents, issues, and profits from buildings that plaintiff rehabilitated and defendant financed. (Id. at p. 56.) The accounting did not relate to compensation under an illegal construction contract, so that case does not aid plaintiffs’ position.
Norwood, involved a contracting business run by a partnership including Norwood and Judd. Judd had a contractor’s license in the name of Fred T. Judd Company, which did not mention Norwood’s name or the joint venture. The Contractor’s License Board was not informed that Norwood had an interest in the business. (Norwood v. Judd, supra, 93 Cal.App.2d at p. 278.) In 1944, the partners ceased conducting business together and Judd promised to dispose of the business and divide the assets of the business. (Id. at p. 279.) However, Judd made only a part payment of profits to Norwood, but failed to pay the balance. The trial court denied relief to Norwood due to the fact the contractor’s license was not in the name of the partnership. (Id. at p. 280.) On appeal, the issue was whether the lack of a partnership license barred Norwood from recovering his portion of the assets and profits. (Id. at p. 283.) The reviewing court concluded that equitable relief would not be denied simply because the parties failed to obtain a partnership license where the cause of action was predicated upon the executed partnership agreement. (Id. at p. 284.) This case does not support plaintiffs’ position.
Plaintiffs’ causes of action for breach of fiduciary duty and accounting were alleged in the complaint to flow directly from the joint venture agreement, which referred to the written contract for the construction of log homes on defendant’s property. It therefore seeks compensation under an unenforceable contract, so plaintiffs are barred from recovering under that agreement.
Plaintiffs place great emphasis on the fact that a joint venture was found to exist by the judge who presided at the bench trial of defendant’s cross-complaint in 2008. However, as we have explained, we are limited to reviewing the correctness of the judgment at the time of the ruling and do not consider post-ruling evidence that was not before the court at the time it made its ruling.
(3) Plaintiffs assert they are entitled to recover because Signature was an agent for Encompass, which was hired to be a licensed general contractor. This theory was not alleged in the complaint nor was it presented to the trial court in connection with the motion for judgment on the pleadings. While we are entitled to review the lower court’s ruling independently, and may consider new legal theories on appeal to justify the court’s ruling (Burnett v. Chimney Sweep, supra, 123 Cal.App.4th at p. 1065), our review is limited to the face of the complaint, which does not allege any contractual or agency relationship between Signature and Encompass. More significantly, the exhibits incorporated by reference into the complaint reveal that Encompass contracted with defendant Stone alone.
(4) Similarly, plaintiffs argue on appeal that Stone defrauded Signature by falsely representing that Encompass held a general contractor’s license, but the fraud claim in the complaint is not based on these facts so we cannot consider it.
(5) Plaintiffs also argue that section 7052 exempts materials not consumed in construction and permits them to recover for those costs. For this reason, they argue that since only two log packages were consumed in construction, they are entitled to recovery for the unused long packages.
Section 7052 states that, “This chapter does not apply to any person who only furnishes materials or supplies without fabricating them into, or consuming them in the performance of, the work of the contractor.” (Italics added.) This section does not exempt unlicensed contractors seeking recovery for left-over materials and we cannot ignore the facts alleged on the face of the complaint. The construction agreement required Signature to both provide the log home packages and fabricate the log homes on Stone’s property, coordinating “all matters relating to construction.” The exemption does not apply to plaintiffs.
(6) In a related discussion, plaintiffs assert that separate from the joint venture, Stone entered into a contract for materials in Canada that were never consumed or fabricated in construction. They argue the contracts are severable. We disagree. The written construction agreement between Stone and Signature expressly required Stone to execute standard log package contracts, and Signature agreed to “provide the general contracting for the five sites: as well as “coordinate all matters relating to the construction including but not limited to: survey; engineering; architect; plan check and approval; transportation of the log packages; crane; re-erection; construction at the site including but not limited to grading, foundation, electrical, plumbing, framing, roofing, finish work, landscaping.” (Italics added.) This was not a separate agreement, which may be severed.
(7) Finally, plaintiffs argue that collateral estoppel applies to the court’s factual findings following the trial on Stone’s cross-complaint, but does not apply to the issues resolved in the prior appeal in case No. E037334. We are not permitted to consider the lower court’s finding on Stone’s cross-complaint, for reasons we have previously explained. Further, the court’s factual findings are irrelevant to the question of whether the complaint properly pled causes of action from which plaintiffs can recover.
As for the effect of the decision in the prior appeal, it is binding on the plaintiffs who were parties to that appeal as to the issues considered there. The law of the case doctrine prevents parties from seeking appellate reconsideration of an already decided issue in the same case absent some significant change in circumstances. (People v. Boyer (2006) 38 Cal.4th 412, 441.) In any event, that appeal addressed the ruling on a demurrer filed by entities other than defendant so the legal effect of that decision on the matter before us involving Stone as an individual is irrelevant.
Having reviewed plaintiffs’ claims, we conclude the motion for judgment on the pleadings was correctly granted.
DISPOSITION
The judgment is affirmed. Respondent is awarded his costs on appeal.
We concur: Hollenhorst J., King J.