TAURMAN v TOWN OF CASCADE
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No. 80-372 I N THE SUPREME COURT O THE STATE O M N A A F F OTN 1981 J A C K TAURMAN and LON WOCASEK, d/b/a T & W CONSTRUCTION, P l a i n t i f f s and A p p e l l a n t s , TOWN O CASCADE, F Defendant Appeal from: , Respondent & Cross-Appellant., D i s t r i c t Court o f t h e Eighth J u d i c i a l D i s t r i c t , I n and f o r t h e County o f C a s c a d e , The H o n o r a b l e H. W i l l i a m Coder, J u d g e p r e s i d i n g . Counsel o f Record: For A p p e l l a n t : D z i v i , C o n k l i n & Nybo, G r e a t F a l l s R i c h a r d D z i v i and Susan Rebeck a r g u e d , Great F a l l s , Montana For Respondents: Cure & Borer, G r e a t F a l l s , Montana Maxon X. D a v i s a r g u e d , G r e a t F a l l s , Montana Submitted: Aprib&3, jbjji Decided : F i l e d :JUN Clerk 4 1981 Mr. J u s t i c e J o h n Conway H a r r i s o n d e l i v e r e d the Court. is an a p p e a l This from the t h e Opinion of District Court E i g h t h J u d i c i a l D i s t r i c t o f t h e S t a t e o f Montana, of the i n and f o r t h e County of C a s c a d e . Appellant, the performance Cascade. T & W Construction, of street Respondent, s u e d on c o n t r a c t f o r construction t h e Town o f in Cascade, the Town of counterclaimed a l l e g i n g t h a t a p p e l l a n t b r e a c h e d t h e c o n t r a c t and f a i l e d t o fully perform i l l e g a l i t y of judgment, the contract the contract. and raised as R e s p o n d e n t moved and t h e m o t i o n was g r a n t e d . summary judgment order. defense for the summary The D i s t r i c t C o u r t a l s o dismissed respondent's counterclaim. from t h e a Appellant appeals R e s p o n d e n t a p p e a l s from t h e d i s m i s s a l of t h e c o u n t e r c l a i m . J a c k Taurman and Lon Wocasek a r e a p a r t n e r s h i p d o i n g business about i n Cascade County a s T July 24, 1979, W & following Construction. competitive On o r bidding, r e s p o n d e n t Town o f C a s c a d e awarded a c o n t r a c t t o a p p e l l a n t T & W work. Construction for street construction and improvement A p p e l l a n t began work on t h e s t r e e t p r o j e c t on A u g u s t 7 , 1979. On A u g u s t 1 5 , 1 9 7 9 , an a g e n t o f r e s p o n d e n t a d v i s e d a p p e l l a n t t o c e a s e and d e s i s t from a n y f u r t h e r work on t h e construction project because of respondent's about obtaining funding f o r t h e p r o j e c t . uncertainty Appellant stopped work. On S e p t e m b e r 2 5 , 1 9 7 9 , a p p e l l a n t , a t t h e d i r e c t i o n o f respondent, resumed work on t h e s t r e e t p r o j e c t . Appellant was u n a b l e t o c o m p l e t e t h e c o n s t r u c t i o n c o n t r a c t d u r i n g t h e 1979 construction season because stoppage ordered by respondent. of the forty-day work Appellant alleged it had completed the grading and graveling portion of the contract. This portion of the work had a reasonable value of $25,857. Respondent refused to pay appellant for the work performed. On January 30, 1980, appellant filed its complaint in the District Court seeking to recover from respondent the value of the work performed under the contract and related damages. On May 8, 1980, appellant applied for and on May 20, 1980, obtained a valid and retroactive 1979 Montana Public Contractor's License, No. 1717B. On May 9, 1980, respondent moved the District Court for summary judgment. Court entered On August summary 20, 1980, the District judgment against appellant. Specifically, in its Conclusion of Law No. 3, the District Court found: "In light of plaintiffs' failure to possess a public contractor's license in 1979, their alleged contract with the Town of Cascade for the performance of that public construction work was illegal pursuant to Section 15-50-201, MCA." We address the following issue in this appeal: Can a contractor collect payment for work performed under a contract with a municipality, if the contractor does not obtain a public contractor's license until after the work has been performed? Section 15-50-101(l)(a), MCA, states: "A 'public contractor' within the meaning of this chapter shall include any person who submits a proposal to or enters into a contract for performing all public c o n s t r u c t i o n work i n t h e s t a t e w i t h t h e f e d e r a l g o v e r n m e n t , s t a t e o f Montana, o r w i t h any b o a r d , c o m m i s s i o n , o r d e p a r t m e n t t h e r e o f o r w i t h any b o a r d o f c o u n t y c o m m i s s i o n e r s o r w i t h any c i t y o r town c o u n c i l o r w i t h any a g e n c y o f a n y t h e r e o f o r w i t h any o t h e r p u b l i c b o a r d , body, c o m m i s s i o n , o r a g e n c y a u t h o r i z e d t o l e t o r award c o n t r a c t s f o r a n y p u b l i c work when t h e c o n t r a c t c o s t , v a l u e , o r p r i c e t h e r e o f e x c e e d s t h e sum o f $ 1 , 0 0 0 . " S e c t i o n 15-50-201, MCA, p r o v i d e s : " I t s h a l l be u n l a w f u l f o r a n y p e r s o n o r a n y combination of persons t o engage i n t h e b u s i n e s s or a c t i n t h e c a p a c i t y of p u b l i c contractor a s herein defined within the s t a t e o f Montana w i t h o u t h a v i n g a l i c e n s e t h e r e f o r a s herein provided." The District Court erred in concluding that the c o n t r a c t e n t e r e d i n t o b e t w e e n t h e p a r t i e s was i l l e g a l a n d , therefore, void. it d i d n o t have a Appellant admits t h a t public contractor's l i c e n s e a s r e q u i r e d by s t a t u t e when accepted the bid proposal. It admits violated the law and may be assessed that it may a misdemeanor it have fine. Nowhere i n t h e s t a t u t e s i s i t d e c l a r e d t h a t a c o n t r a c t made w i t h o u t a l i c e n s e is u n e n f o r c e a b l e o r v o i d . Nowhere i n t h e s t a t u t e d o e s i t e x p r e s s l y p r o h i b i t t h e making o f a c o n t r a c t o r recovery o u t s i d e of t h e c o n t r a c t . ( 1 9 2 9 ) , 85 Mont. 170, 278 P. 126. which t h e s t a t u t e made i l l e g a l . S e e McManus v . It therefore, is n o t t h e c o n t r a c t I t is " u n l a w f u l " t o " a c t i n t h e c a p a c i t y of a p u b l i c c o n t r a c t o r . " was l e g a l a n d , Fulton enforceable. A l v a r a d o I c e P a l a c e ( 1 9 7 4 ) , 34 Cal.App.3d The c o n t r a c t See V i t e k , itself I n c . v. 5 8 6 , 110 C a l . R p t r . The l i c e n s i n g l a w s h o u l d n o t be u s e d a s a s h i e l d f o r t h e avoidance of a just o b l i g a t i o n o r t o p r o h i b i t a. c l a i m for just compensation. We reverse the District Court's summary judgment and dismissal further of respondent's proceedings opinion. W e concur: Chief Justice be counterclaim conducted and consistent order that with this
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