Stewart v. Hammond , 78 Wash. 2d 216 ( 1970 )

Stafford, J.

This is 'an appeal from a judgment of dismissal entered on respondents’ motion at the end of appellant’s case.

Archie Stewart, the appellant, lived in Lewiston, Idaho and pursued the trade of carpentry both in Idaho and nearby Clarkston, Washington. During the time here involved he was not registered as a contractor pursuant to RCW 18.27.

The respondents, Mr. and Mrs. Hammond, engaged appellant to make minor repairs and alterations to their home in Clarkston. It was orally agreed that appellant would furnish 'all labor and procure material necessary for the undertaking. Appellant was to be reimbursed for his actual costs and paid an hourly wage for his personal labor. As frequently happens, the job expanded into a major project. During the 9 weeks that followed, appellant made numerous purchases of materials, hired four helpers, and employed several other contractors to perform specialty services.

As the work progressed, respondents made partial payments from which appellant paid for the materials and labor as agreed. However, when appellant submitted his final statement for $2,405.81, respondents felt it was excessive and refused to pay more than $1,800. Appellant filed a claim of lien for the balance and brought this action to foreclose the lien.

The trial court granted respondents’ motion to dismiss at the end of appellant’s case because of his failure to allege and prove that he was registered as a contractor.¹ The trial court also found that appellant was not relieved from compliance by RCW 18.27.090(15). ²

The sole issue presented by 7 of appellant’s 10 assignments of error is whether his lack of registration precludes recovery.

The trial court held that funds received by appellant for the payment of laborers, specialty contractors and ma-terialmen were “compensation” in excess of wages. It concluded that appellant was not entitled to the benefit of RCW 18.27.090(15). On the other hand, appellant contends that “reimbursement” for out-of-pocket expenses is not “compensation”, citing State ex rel. Todd v. Yelle, 7 Wn.2d 443, 110 P.2d 162 (1941). Continuing with the argument, appellant asserts that the balance of funds received by him consisted of “wages as his sole compensation” and thus RCW 18.27.090(15) exempted him from the operation of the “contractor registration” law.

fl] It is not necessary for us to resolve the issue posed by appellant. Contrary to his suggestion, RCW 18.27.090 (15) does not exclude all persons who receive “wages as their sole compensation”. One must be an employee in order to receive the benefit of the exclusion.

Appellant classified himself as “self-employed” and as a “sole proprietorship” in his federal income tax returns. He made his own provision for social security and self-employment taxes rather than having them withheld by an employer. No payroll relationship common to wage earners existed between appellant and respondents. He performed his work in the pursuit of an independent business as he had done for 23 years. He undertook to repair, add to, and improve the respondents’ building. Nevertheless, appellant suggests that these factors are not sufficient to classify him as an “independent contractor.”

The common law definition of “independent contractor” is not applicable because a specific statutory definition has been adopted. Furthermore, foreign authority is not helpful because little uniformity exists in either the content or application of the various “contractor registration” statutes.³ Each case rests on its own peculiar fact pattern or its own unique statutory language.

Clearly, appellant was a “contractor” within the meaning of RCW 18.27.010:

A “contractor” ... is any person . . . who . . . in the pursuit of an independent business undertakes to . . . construct, alter, repair, add to, subtract from, improve . . . for another, any building . . . or other structure . . . attached to real estate or to do any part thereof ... or works in connection therewith; . . .

Inasmuch as appellant falls within the specific language of the statutory definition, he is not entitled to the exclusionary benefit of RCW 18.27.090(15). It is expressly limited to “employees”.

RCW 18.27, et seq., was designed to prevent the victimizing of a defenseless public by unreliable, fraudulent and incompetent contractors, many of whom operated a transient business from the relative safety of neighboring states. Public protection was sought by the registration and bonding of contractors. RCW 18.27.020-.040 inclusive. Noncompliance was discouraged by providing a criminal penalty, RCW 18.27.020, and by denying offenders access to the courts for collection of compensation for performance of work or for breach of contract. RCW 18.27.080. Having failed to comply with a statute designed for protection of the public, appellant must abide the consequences of that failure even though it is not contended that he performed the contract improperly.

Appellant suggests that he be permitted to recover despite the statutory prohibition. He argues that respondents have received that for which they contracted; that enforcement of the statute as written will cause him an undue forfeiture; and that it will result in an undue enrichment of respondents.

The statute was designed for protection of the public. The overriding public policy must not be defeated by an attempt to accommodate one who has violated its specific provisions, albeit unwittingly.⁴ The law will be nullified if noncomplying contractors are permitted to evade the statute by a claim of “unwitting violation” or “undue loss” or by a claim that the other contracting party will be “unduly enriched”. Every noncomplying contractor could raise one or all of the suggested defenses. The remedy for those who find themselves in the position of appellant lies with the legislature.

Appellant’s remaining assignments of error relate to the trial court’s rejection of his proposed findings of fact 2, 3, 4 and 5. None were set out verbatim in his brief as required by ROA I-43. The assignments of error will not be considered. El Cerrito, Inc. v. Ryndak, 60 Wn.2d 847, 376 P.2d 528 (1962).

The trial court is affirmed.

Hunter, C. J., Finley, Rosellini, and Hamilton, JJ., concur.

1 RCW 18.27.080 provides:

“No person engaged in the business or acting in the capacity of a contractor may bring or maintain any action in any court of this state for the collection of compensation for the performance of any work or for breach of any contract for which registration is required under this chapter without alleging and proving that he was a duly registered contractor at the time he contracted for the performance of such work or entered into such contract.” (Italics ours.)

2 RCW 18.27.090.

“This chapter shall not apply to:

“(15) Any person who engages in the activities herein regulated . . . as an employee with wages as his sole compensation; . . .”

(Italics ours.)

3 Annot., 19 A.L.R.3d 1407 (1968).

4 We have previously held that an unlicensed person cannot recover under a contract where such service was of the type for which an occupation license is required. Shorewood, Inc. v. Standring, 19 Wn.2d 627, 144 P.2d 243 (1943); Kinney v. Sando, 28 Wn.2d 252, 182 P.2d 45 (1947), both of which interpret RCW 18.85.100. Meyer v. Simpson, 34 Wn.2d 486, 209 P.2d 294 (1949) interpreted RCW 18.08.010, since repealed by Laws of 1959, ch. 323, § 19, p. 1579. Also see the cases collected in Annot., 82 A.L.R.2d 1429 at 1440 (1962).