Tuesday, November 13, 2012
Defendant Cannot Invoke Sovereign Immunity, C.A. Rules
By a MetNews Staff Writer
A defendant cannot skirt the statute barring recovery for work done by an unlicensed contractor on the ground that the work was done for an Indian tribe and the statute has no applicability to tribal lands, the Court of Appeal has ruled.
The decision comes in Twenty-Nine Palms Enterprises Corporation v. Bardos, E051769. It was filed Oct. 11 and certified for publication on Friday.
The opinion affirms the award of $751,995 to a tribal corporation that had paid that sum to Cadmus Construction Company for work in constructing a temporary access road and parking lot at a casino. Cadmus did not hold a contractor’s license.
Business and Professions Code Sec. 7031(b) provides that “a person who utilizes the services of an unlicensed contractor may bring an action in any court of competent jurisdiction in this state to recover all compensation paid to the unlicensed contractor for performance of any act or contract.”
“Cadmus asserts the unlicensed contractor statute…is not enforceable in a contract made with a tribal entity for work done on tribal land,” Justice Douglas P. Miller said in his opinion for the Fourth District’s Div. Two. “We disagree because Cadmus cannot assert Palms’s sovereign immunity.”
He went on to explain:
“Since the sovereign immunity defense is only available to the tribe and the tribal entities, the defense was not available to Cadmus—a non-tribal entity. Thus, Cadmus cannot rely on the defense theory that section 7031 was not enforceable in a contract made with a tribal entity for work done on tribal land, because that defense relies on principles of sovereign immunity. For example, in Cadmus’s opening brief, it argues, ‘[I]t is also well established that building and zoning codes are not operative on Tribal property because of sovereignty interference....’ Cadmus further argues, ‘The interference with Indian sovereignty of licensing requirements is illustrated in this case: Had Cadmus been forced to obtain a new license prior to commencing work, [then] the Tribe would have had to choose between selecting another contractor or delaying the start of construction....’ Cadmus is asserting the tribe’s sovereign immunity to prevent the tribe from pursuing an action against him in state court. Cadmus cannot do this—the sovereign immunity defense is reserved for the tribe and tribal entities.”
Cadmus argued that the tribal corporation represented to it that state licensing requirements did not apply to tribal lands, and that the plaintiff was therefore estopped from invoking Sec. 7031. Miller responded that “equitable principles may not be used to circumvent Business and Professions Code section 7031.”
Even if that defense could be put forth, he said, an estoppel would not be found because the owner of Cadmus, Paul Bardos, admitted he had not told anyone at the tribal corporation that he lacked a contractor’s license.
He said at a deposition:
“I didn’t need to. They had private investigators.”
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