Judge: Curtis A. Kin, Case: 24STCV02125, Date: 2024-05-28 Tentative Ruling
Case Number: 24STCV02125 Hearing Date: May 28, 2024 Dept: 86
MOTION FOR INJUNCTIVE AND DECLARATORY RELIEF
Date: 5/28/24
(1:30 PM)
Case: Jorge Teixeira v.
Biltmore Remodeling Services, Inc. et al. (24STCV02125)
TENTATIVE RULING:
Plaintiff’s Motion for Injunctive and Declaratory Relief is GRANTED.
Petitioner seeks injunctive and declaratory relief to
release a mechanic’s lien recorded against real property located at 1200 S.
Grand Avenue, Los Angeles, CA 90015.
“A motion to remove a mechanic’s lien is recognized as a
device that allows the property owner to obtain speedy relief from an
unjustified lien or a lien of an unjustified amount without waiting for trial
on the action to foreclose the lien.” (Howard S. Wright Construction Co. v.
Superior Court (2003) 106 Cal.App.4th 314, 318.) CCP § 526(a) states that
an injunction may be granted when “it appears by the complaint that the
plaintiff is entitled to the relief demanded” and when “it appears by the
complaint or affidavits that the commission or continuance of some act during
the litigation would produce waste, or great or irreparable injury, to a party
to the action.” (CCP § 526(a)(1), (a)(2).)
I.
WHETHER PLAINTIFF IS ENTITLED TO RELIEF DEMANDED
As background, plaintiff Jorge Teixiera is the sole member
of Awesome Coffee LLC. (Teixeira Decl. ¶ 3.) On February 7, 2023, plaintiff, on
behalf of his limited liability company, entered into a lease agreement to rent
the property located at 1200 S. Grand Avenue, Los Angeles, CA 90015
(“Property”). (Teixeira Decl. ¶ 4.)
On September 1, 2023, plaintiff entered into a written
contract to convert the Property to a coffee shop. (Teixeira Decl. ¶ 4 &
Ex. A.) On the top-left corner of each of the three pages of the contract, the
company Biltmore Remodeling Services Inc was identified. In addition, “Biltmore
Inc. CSL. [Contractors State License] #1061499” was written toward the
bottom-left corner of each of the three pages of the contract. Defendant Ben
Assil signed the last page of the contract. Under Assil’s signature, “Buildmor
Const. & Remod. Inc.” was hand-written.
Pursuant to Assil’s instructions, plaintiff made payments to
“Buildmore Construction & Remodeling Inc or Buildmore C&R Inc.”
(Teixeira Decl. ¶¶ 8, 13 & Ex. E.) On January 3, 2024, the project was
abandoned without completion. (Teixeira Decl. ¶ 10.) On March 7, 2024, Buildmore
C&R Inc. recorded a mechanics lien against the Property. (Teixeira Decl. ¶
11 & Ex. C.) Buildmore C&R Inc. claimed that plaintiff owes it
$73,371.30. The recording of the lien caused plaintiff’s limited liability
company to be in default of its lease. (Teixeira Decl. ¶ 12 & Ex. D.)
Plaintiff demonstrates that he is entitled to release of the
mechanics lien pursuant to Business and Professions Code § 7031.
Plaintiff maintains that the entity that recorded the
mechanics lien, Buildmore C&R Inc., is an unlicensed contractor and therefore
cannot recover more than $500 under Business and Professions Code § 7031. (See
Bus. & Prof. Code § 7027.2 [“Notwithstanding any other provision of this
chapter, a person who is not licensed pursuant to this chapter may advertise
for construction work or a work of improvement covered by this chapter only if
the aggregate contract price for labor, material, and all other items on a
project or undertaking is less than five hundred dollars ($500), and he or she
states in the advertisement that he or she is not licensed under this
chapter”].)
Business and Professions Code § 7031(a) states: “Except as
provided in subdivision (e) [pertaining to substantial compliance with
licensing requirements], no person engaged in the business or acting in the
capacity of a contractor, may bring or maintain any action, or recover in law
or equity in any action, in any court of this state for the collection of
compensation for the performance of any act or contract where a license is
required by this chapter without alleging that they were a duly licensed contractor
at all times during the performance of that act or contract regardless of the
merits of the cause of action brought by the person, except that this
prohibition shall not apply to contractors who are each individually licensed
under this chapter but who fail to comply with Section 7029 [pertaining to
requirement to obtain a joint venture license].”
Business and Professions Code § 7031 provides “a complete
defense to claims for compensation made by a contractor who performed work
without a license, unless the contractor meets the requirements of the
statutory substantial compliance doctrine. [Citation.]” (Alatriste v. Cesar's Exterior Designs, Inc. (2010) 183 Cal.App.4th
656, 664-65.) If the contractor does not satisfy the requirements of the
substantial compliance doctrine and the contractor was not licensed at all
times during the performance of the contract, then the contractor cannot obtain
compensation for any work done under the contract. (Id. at 665, citing MW
Erectors, Inc. v. Niederhauser Ornamental & Metal Works Co., Inc. (2005) 36 Cal.4th 412, 419.)
The legislative intent of Business & Professions Code
§7031 was to ensure that contractors were properly licensed at all times by
imposing “a stiff all-or-nothing penalty for unlicensed work by specifying that
a contractor is barred from all recovery for such an ‘act or contract’ if
unlicensed at any time while performing it.” (MW Erectors, Inc. v.
Niederhauser Ornamental & Metal Works Co., Inc. (2005) 36 Cal.4th 412,
426.) “The statute’s harsh results are justified by the importance of deterring
violations of the licensing requirements.” (White v. Cridlebaugh (2009)
178 Cal.App.4th 506, 519.)
The contract in this matter provided for the conversion of
an open space to a coffee shop, including work on plumbing, drains, water
lines, electrical wiring, as well as installation of tiling in bathrooms, drywall,
a Heating, Ventilation, and Air Conditioning system, an emergency glass door,
and cabinets. (Teixeira Decl. ¶ 5 & Ex. A.) The recorded mechanics lien states
that “Buildmore C&R Inc.” performed the following work: “Converting open
space to coffee shop. Plumbing, electrical, fire sprinkler, framing, HVAC
system, main electrical panel, drain system, etc.” (Teixeira Decl. ¶ 11 &
Ex. C.)
For purposes of Business & Professions Code § 7031,
“contractor” is defined as “any person who undertakes to or offers to undertake
to, or purports to have the capacity to undertake to, or submits a bid to, or
does himself or herself or by or through others, construct, alter, repair, add
to, subtract from, improve, move, wreck or demolish any building . . . or other
structure . . . or to do any part thereof, including the erection of
scaffolding or other structures or works in connection therewith . . . and
whether or not the performance of work herein described involves the addition
to, or fabrication into, any structure, project, development or improvement
herein described of any material or article of merchandise.” (Bus. & Prof.
Code § 7026.) Based on the work indicated on the contract and the mechanics
lien, the contract contemplated that a “contractor” perform the work set forth
therein.
With respect to the identity of the contractor, although the
contract identifies “Biltmore Remodeling Services Inc,” “Biltmore Inc.,” and
“Buildmor Const. & Remod. Inc,” the entity that recorded the mechanics lien
was Buildmore C&R Inc. (Teixeira Decl. ¶ 11 & Ex. C.) Buildmore C&R
Inc. is not registered with the California Secretary of State. (Omrani Decl. ¶
2 & Ex. F.) Buildmore C&R Inc. is not licensed with the Contractors
State License Board. (Omrani Decl. ¶ 3 & Ex. G.) Because Buildmore C&R
Inc. is not licensed, Business and Professions Code § 7031 bars Buildmore
C&R Inc. from obtaining compensation under the mechanics lien. (See Hydrotech
Systems, Ltd. v. Oasis Waterpark (1991) 52 Cal.3d 988, 1002 [unlicensed
contractor cannot allege fraudulent promise to pay to obtain compensation for
work].)
Although defendant Biltmore Inc. was identified in the
contract and appears to be licensed (see Omrani Decl. ¶ 8 & Ex. I),
Biltmore Inc. is not the entity identified on the mechanics lien. To the extent
that Buildmore C&R Inc. is the fictitious business name of licensed entity
Biltmore Inc., Business & Professions Code § 17910.5(a) prohibits adoption
of any name which includes “Inc.” unless the fictitious name is a corporation
organized under the laws of California or another jurisdiction. Buildmore
C&R Inc. is not registered with the California Secretary of State. (Omrani
Decl. ¶ 2 & Ex. F.) No opposition has been filed by Buildmore C&R Inc. providing
any authority for the proposition that it can record and enforce a lien based
on a license owned by another entity.
For the foregoing reasons, plaintiff demonstrates that he is
entitled to release of the mechanics lien at issue. Buildmore C&R Inc.’s
recordation of the mechanics lien was unlawful, which means that Buildmore
C&R Inc. may not claim unpaid compensation through the lien. (See FAC
¶¶ 2, 92, 93, 96, 97.)
II.
IRREPARABLE INJURY
The Court finds that plaintiff provided evidence that he
will suffer irreparable injury if the lien is not released. Plaintiff’s limited
liability company faces eviction due to the mechanics lien recorded against the
Property. (Teixeira Decl. ¶ 12 & Ex. D.) Real property is considered
unique. (Reese v. Wong (2001) 93 Cal.App.4th 51, 57.)
Because the lien is improperly recorded, for the reasons
stated above, any harm claimed by defendants is outweighed by the harm to
plaintiff.
III.
CONCLUSION
The motion is GRANTED. The Court will sign the proposed
order lodged on May 2, 2024.