Attorney Tom Miller Defeats $1 Million Construction Claim from Improperly Licensed Contractor

October 16, 2008

In a case involving an unlicensed contractor attempting to charge cost overruns to the owner, the trial court barred all collections against the owner and the appeals court affirmed.

An Inland Empire business owner defeated a $1,000,000 construction claim on a motion for summary judgment.

The business owner entered into an agreement with a large contractor to construct a new building for their business. The original cost for the building was to be $750,000, but the contractors costs exceeded $1,000,000.

Upon refusing to pay for the cost overruns, the business owner sought the legal counsel of Tom Miller at Reid & Hellyer. Senior Partner Tom Miller and his staff quickly determined that the building contractor was not appropriately licensed for the type of construction that they sought payment for.

The contractor initiated a foreclosure on the newly constructed property in an attempt to collect. Attorney Miller filed a lawsuit as well as a motion to stop the foreclosure action. An injunction was granted by the Court in favor of the client and the foreclosure was stayed.

The trial court subsequently granted the client's motion for summary judgment upon the basis that the contractor did not possess the appropriate contractor's license. The contractor appealed. The California Appellate Court affirmed the trial court's grant of summary judgment, and granted the client costs on the appeal. The contractor filed a subsequent appeal with the California Supreme Court. The high court denied the contractor's petition for review.

As a result of the contractor's failure to abide by the state licensing regulations, the client gained a newly constructed business while the contractor was barred entirely from collecting any amount of the $1,000,000 that they sought.

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