34-2014-00157690

Linear Cabling Solutions vs. Dept of Motor Vehicles

Nature of Proceeding:      Hearing on Demurrer to Complaint

Filed By:   Waters, George

Defendant Department of Motor Vehicles’ (“DMV”) demurrer to complaint is ruled on as
follows.

Moving counsel is admonished because the notice of demurrer does not provide the
correct time for hearings in Dept. 54, which is 9:00 a.m.

DMV entered into contract with Linear Cabling Solutions, Inc. (“LCS”) for
telecommunications work but before the contract was completed, the person who held
the necessary contractor’s license left LCS and joined West Coast Computer
Exchange, Inc. (“WCCE”).  LCS then arranged to have WCCE complete the work due
under the DMV contract.  It is alleged that DMV has not paid for the completed work.

The complaint here purports to allege a cause of action (“COA”) for breach of contract,
for common counts, for “unjust enrichment/quantum meruit” in connection with
telecommunications work performed for DMV by two different plaintiffs, Linear Cabling
Solutions, Inc. (“LCS”) and West Coast Computer Exchange, Inc. (“WCCE”).

DMV now demurs to the complaint on various grounds discussed below.  Plaintiffs
oppose.

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1   COA for Breach of Contract.  DMV demurs to this COA because LCS has not
alleged it held the requisite contractor’s license for the duration of the contract at issue,
as expressly required by Business and Professions Code §7031(a).

In light of the Supreme Court’s analysis in MW Erectors, Inc. v. Niederhauser
Ornamental and Metal Works Co., Inc. (2005) 36 Cal.4th 412 and particularly its
concurrence with “well-entrenched case law” holding that one who is not duly licensed
at any time during performance of an agreement is ineligible to recover any
compensation under the terms of §7031 (MW Erectors, at 425-426), this Court finds
that the allegation at Paragraph 3.b.b. of the Judicial Council Form Complaint
(asserting that LCS and WCCE held licenses “for all periods when work [was] being
performed by each entity” (emphasis added)) does not comply with the requirements
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of §7031(a).  Therefore, the demurrer to the 1   COA is sustained.

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Because the 1   COA is by its own terms not asserted on behalf of WCCE but rather
LCS only, DMV’s demurrer on the grounds that WCCE’s allegations fail to comply with
§7031(a) is dropped as moot.

2nd COA for “Unjust Enrichment.”   DMV contends this COA is not sufficiently pled by
LCS because the complaint does not comply with Business and Professions Code
§7031(a)’s requirement and because under Government Code §815, a public entity             like the DMV has no liability unless provided by statute.

As discussed above, this Court agrees the complaint fails to allege that LCS was at all
times during the performance of the subject contract a duly licensed contractor.
Likewise, it is well established that a public entity has no liability except where
statutorily provided and the complaint cites no statute which permits a public entity like
DMV to be held liable on a theory of “unjust enrichment.”  Coupled with the fact that
Business and Professions Code §7031(a) expressly precludes recovery in law or in
equity unless there is a sufficient allegation of compliance with contractor license
requirements, the demurrer to the 2nd COA is also sustained as to plaintiff LCS.

DMV also demurs to the 2nd COA as asserted by plaintiff WCCE on the same two
grounds cited above as well as on the ground there is no allegation that WCCE timely
complied with the Government Claims Act (“GCA”).  The Court sustains the demurrer
as to WCCE on the basis that the complaint does not satisfy the requirement of §7031
(a) and on the basis that DMV cannot be held liable on an “unjust enrichment” theory
since this is not a theory permitted by statute to be asserted against a public entity.
However, the demurrer on the final ground of non-compliance with the GCA is
overruled because Paragraph 5 of the Judicial Council Form Complaint sufficiently
alleges compliance with the “applicable claims statute.”

Since this is the first challenge to the complaint, leave to amend is granted except
where noted otherwise.  Plaintiffs may file and serve an amended complaint no later
than 7/11/2014.  Although not required by court rule or statute, plaintiffs are
directed to present a copy of this order when the amended complaint is
presented for filing.

Defendant to respond within 10 days if the amended complaint is personally served,
15 days if served by mail.

If defendant demurs to the amended complaint or moves to strike, a copy of the
amended complaint shall be included with the moving papers.

This minute order is effective immediately.  No formal order or other notice is required.
(Code Civ. Proc. §1019.5; CRC Rule 3.1312.)