Opinion
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
San Mateo County Super. Ct. No. CIV 457740
Margulies, J.
Plaintiff Ron Patton is a construction contractor who rebuilt the residence of defendants, John Candelori and Polly Vandersyde-Candelori, after a fire. He appeals from a judgment dismissing his causes of action for breach of contract and foreclosure of a mechanic’s lien against the Candeloris and the Polly Vandersyde Trust. Plaintiff maintains that the trial court erred in (1) limiting his recoverable damages for breach of contract and dismissing his mechanic’s lien claim; and (2) sanctioning his trial counsel in the amount of $162.50 for failing to appear for trial on May 30, 2007. We affirm the judgment and decline to reach the merits of plaintiff’s sanctions argument.
I. BACKGROUND
Defendants’ home burned down in 2004. Their insurance carrier advised them that there would be $545,000 available to them to rebuild their home. Defendants met with plaintiff who told them he could rebuild their home with the insurance money they were to receive. Proceeding without a written contract, plaintiff orally agreed to rebuild defendants’ home on a time-and-materials basis.
During the construction of the new home, plaintiff would request funds and defendants would pay him. Plaintiff provided no itemized bills for his work. In November 2005, defendants had paid plaintiff all of the insurance monies and demanded a meeting with plaintiff to discuss how much it would cost to finish the job. On November 17, 2005, plaintiff agreed to finish the job for $50,000, according to defendants. Plaintiff signed a written agreement to that effect, and defendants paid him $50,000.
Plaintiff filed his action in September 2006, asserting four causes of action: (1) breach of an oral contract to reconstruct defendants’ home on a time-and-materials basis with an estimated price of $524,084.46, not including additional labor and materials defendants requested during the project, resulting in monetary damages of $117,095.40; (2) common counts seeking recovery of the value of work, labor, services, and materials provided in the amount of $117,095.40; (3) promissory fraud; and (4) foreclosure of plaintiff’s mechanic’s lien against defendants’ property in the amount of $117,095.40, plus prejudgment interest.
Defendants answered and alleged a number of affirmative defenses, including that plaintiff’s action was barred by Business and Professions Code section 7164 and Arya Group, Inc. v. Cher (2000) 77 Cal.App.4th 610 (Arya).
All statutory references are to the Business and Professions Code unless otherwise indicated.
Section 7164 provides in relevant part as follows: “(a) Notwithstanding Section 7044, every contract and any changes in a contract, between an owner and a contractor, for the construction of a single-family dwelling to be retained by the owner for at least one year shall be evidenced in writing signed by both parties. [¶] (b) The writing shall contain the following: [¶] (1) The name, address, and license number of the contractor. [¶] (2) The approximate dates when the work will begin and be substantially completed. [¶] (3) A legal description of the location where the work will be done. [¶] (4) A statement with the heading ‘Mechanics’ Lien Warning’ as follows: [¶] ‘MECHANICS LIEN WARNING: [¶] Anyone who helps improve your property, but who is not paid, may record what is called a mechanics’ lien on your property. A mechanics’ lien is a claim, like a mortgage or home equity loan, made against your property and recorded with the county recorder.’ ”
On May 8, 2007, plaintiff voluntarily dismissed his second cause of action alleging common counts and seeking damages based on the recovery of the value of his work, labor, services, and materials.
Before trial, defendants moved in limine for an order precluding plaintiff’s expert, Jonathan Schermer, from offering any testimony or evidence at trial. Defendants relied on (1) a legal argument that plaintiff’s violation of section 7164 limited his legal remedy to an unjust enrichment recovery based on the reasonable value of the work he performed, and (2) Schermer’s deposition testimony that he would offer no opinion about the reasonable value of the goods and services plaintiff provided.
On May 31, 2007, the trial court granted defendants’ motion in limine on the ground that under section 7164, as construed in Arya, plaintiff’s remedy and damages evidence would be limited to unjust enrichment. The court advised counsel that the matter could proceed based on the remedy allowed in Arya, unjust enrichment. Plaintiff’s trial counsel responded as follows: “We have waived that claim. We have dismissed our unjust enrichment claim.” Plaintiff took the position that he was entitled to a contractual remedy because he had fully performed the contract and relied on his oral contract with defendants to his detriment. His counsel stated: “The unjust enrichment measure is an alternative measure, which is why we dismissed it.” After hearing plaintiff’s argument, the court reiterated its original ruling that plaintiff’s sole remedy was for unjust enrichment.
Also on May 31, 2007, the trial court issued an order sanctioning plaintiff’s counsel in the amount of $162.50, for his failure to appear for trial on the previous day.
Plaintiff and defendants entered into a stipulation for purposes of this appeal in which plaintiff admitted violating section 7164 and dismissed his third cause of action for fraud. Defendants admitted that plaintiff completed construction of the house in a manner sufficient to obtain a final inspection in November 2005, and that they moved into the residence on or before December 30, 2005. Upon defendants’ motion, and over plaintiff’s objection, the trial court thereupon dismissed plaintiff’s fourth cause of action for foreclosure of his mechanic’s lien. A judgment dismissing plaintiff’s first and fourth causes of action was thereafter entered, and this timely appeal from the judgment followed.
II. DISCUSSION
Plaintiff maintains that the trial court erred in (1) dismissing his contract and mechanic’s lien causes of action; and (2) sanctioning his trial counsel in the amount of $162.50 for failing to appear for trial on May 30, 2007.
A. Contract Claim
Arya was an appeal from a trial court ruling sustaining a demurrer without leave to amend. (Arya, supra, 77 Cal.App.4th at p. 612.) According to the complaint, the plaintiff in Arya, Arya Group, Inc. (Arya), entered into an oral agreement to construct a residence. (Ibid.) The owner ultimately terminated her contract with Arya without paying a substantial balance due. (Id. at p. 613.) Arya sued for breach of contract, among other claims. (Ibid.) The Court of Appeal initially addressed the issue of whether Arya was precluded under section 7164 from pursuing a breach of contract claim due to its failure to secure a written contract. (Ibid.)
Relying principally on an earlier California Supreme Court case involving the application of section 7159, Asdourian v. Araj (1985) 38 Cal.3d 276 (Asdourian), the Court of Appeal held that a contract made in violation of section 7164 is not void as a matter of law. (Arya, supra, 77 Cal.App.4th at pp. 614–618.) Under Arya’s holding, a contractor would be entitled to enforce its contract claim in the absence of a written agreement complying with section 7164 in appropriate circumstances. (Arya, at p. 618.) The circumstances to be considered by a court might include such factors as the owner’s experience and sophistication in residential construction projects, whether the owner had legal representation, the amount of work performed by the contractor, and whether the owner would be unjustly enriched if the contract was not enforced in some fashion. (Id. at pp. 615–616.) However, under Arya, the contractor’s recovery in such cases would be limited to the reasonable value of the work performed “to the extent [that the owner] would otherwise be unjustly enriched as a result of her failure to compensate [the contractor] for the reasonable value of its work.” (Id. at p. 618.) In other words, Arya held that although a contractor might, in appropriate circumstances, be permitted to pursue a breach of contract claim despite noncompliance with section 7164, the contractor’s recovery would be limited to the difference, if any, between the reasonable value of the work performed less the amount the owner had actually paid to the contractor for the work. Arya does not hold that a contractor who failed to comply with section 7164 would be able to receive full breach of contract damages (i.e., the full contract price less the amount paid) if such damages exceeded any unjust enrichment conferred upon the owner.
Section 7159 requires home improvement contracts to be in writing and to contain certain specified provisions and warnings similar to those in section 7164.
Because the factors affecting the contractor’s entitlement to enforce the contract could not be evaluated at the pleading stage in Arya, the Court of Appeal reversed the order sustaining the owner’s demurrer to the breach of contract claim. (Arya, supra, 77 Cal.App.4th at p. 618.)
Asdourian involved a claim that certain home improvement contracts were illegal and unenforceable because they did not comply with section 7159. (Asdourian, supra, 38 Cal.3d at p. 290.) The Asdourian court first stated the general rule that “a contract made in violation of a regulatory statute is void.” (Id. at p. 291.) Quoting from Southfield v. Barrett (1970) 13 Cal.App.3d 290, the court explained that the rationale for the general rule is that the importance to the public of discouraging transactions prohibited by statute outweighs the potential for creating an injustice between the parties. (Asdourian, at p. 291.) But Asdourian noted that the case law had recognized a wide range of exceptions to the general rule, including the exception exemplified in Southfield and other cases that “illegal contracts will be enforced to avoid unjust enrichment to the defendant at the expense of the plaintiff.” (Asdourian, at p. 291, citing Southfield, at p. 294; see also South Tahoe Gas Co. v. Hofmann Land Improvement Co. (1972) 25 Cal.App.3d 750, 758–759; Calwood Structures, Inc. v. Herskovic (1980) 105 Cal.App.3d 519, 522, disapproved on another ground in Asdourian, at p. 293, fn. 11.)
As we read the record in this case, defendants in their in limine motion to exclude Schermer’s testimony impliedly conceded that this might be an appropriate case in which to allow enforcement of the oral contract to the extent allowed by Arya, i.e., with the plaintiff’s recovery limited to the amount, if any, by which the defendants were unjustly enriched. Since Schermer admitted that he had no opinion on the reasonable value of plaintiff’s work, his testimony was subject to exclusion. Further, by voluntarily dismissing his second cause of action for common counts, which would have been based on proof of the reasonable value of his services, plaintiff was impliedly conceding that he could not prove his entitlement to any monetary relief based on unjust enrichment.
Plaintiff confirmed that he was waiving any claim based on unjust enrichment when he responded to the trial court’s offer to allow him to proceed based on the unjust enrichment remedy allowed in Arya. On this appeal, plaintiff makes no argument that he is entitled to pursue such a remedy for breach of contract, but insists that he is entitled to damages as measured by the terms of his oral contract and that he is not limited to damages based on unjust enrichment. As plaintiff reads it, Arya holds that a contractor may proceed on his contract claim in order to avoid unjust enrichment, but his recovery is not limited to the amount necessary to accomplish that result.
Plaintiff misreads Arya and the earlier cases upon which it builds. We have found no comparable case in which breach of contract damages were allowed. Although plaintiff would have been allowed to proceed with his contract claim had he agreed that his recovery was limited to damages based on unjust enrichment, the record is clear that plaintiff expressly waived the right to proceed on that basis and evidently did not believe he could prove any right to relief on that theory. Since plaintiff was barred by his admitted violation of section 7164 from obtaining breach of contract damages, and he waived any claim for damages based on unjust enrichment, his mechanic’s lien cause of action was also properly dismissed.
The case plaintiff relies on, Gonzales v. Concord Gardens Mobile Home Park Ltd. (1979) 90 Cal.App.3d 871, does not advance his position. Gonzales involved a different statute. (Id. at p. 874.) The issue in the case was whether the plaintiff could recover for the reasonable value of his work, not whether he could obtain breach of contract damages. (Id. at p. 872.)
B. Sanctions
Plaintiff maintains that his counsel had insufficient notice or opportunity to be heard concerning the $162.50 in sanctions awarded against him, and that such sanctions were unauthorized by law.
Plaintiff’s counsel filed no appeal on his own behalf in this case and he is not listed as an appellant in the notice of appeal. Plaintiff lacks standing to appeal the sanctions award on his attorney’s behalf because plaintiff is not “aggrieved” by the award. (Code Civ. Proc., § 902.) The sanctions order is therefore not reviewable on this appeal. (Calhoun v. Vallejo City Unified School Dist. (1993) 20 Cal.App.4th 39, 42; Imuta v. Nakano (1991) 233 Cal.App.3d 1570, 1585.)
III. DISPOSITION
The judgment is affirmed.
We concur: Swager, P.J., Flinn, J.
Judge of the Superior Court of Contra Costa County, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.