In Alatriste v. Cesar's Exterior Designs, Inc. (2010) 183 Cal.App.4th 656, the court rejected the unlicensed contractor's argument that disgorgement was "unfair and 'serves no purpose other than punishment.' As noted, the legislative committee reports show that, in enacting section 7031, subdivision (b), the Legislature was specifically aware that permitting reimbursement may result in harsh and unfair results to an individual contractor and could result in unjust enrichment to a homeowner, but nonetheless decided that the rule was essential to effectuate the important public policy of deterring licensing violations and ensuring that all contractors are licensed. As a judicial body, we are not permitted to second-guess these policy choices." "Section 7031, subdivision (b) is part of the Contractors' State License Law, which 'is a comprehensive legislative scheme governing the construction business in California. This statutory scheme provides that contractors performing construction work must be licensed unless exempt. ( 7026 et seq., 7040 et seq.) "The licensing requirements provide minimal assurance that all persons offering such services in California have the requisite skill and character, understand applicable local laws and codes, and know the rudiments of administering a contracting business. " The laws are designed to protect the public from incompetent or dishonest providers of building and construction services.'" (Alatriste, supra, 183 Cal.App.4th at p. 664) "This statutory scheme encourages licensure by subjecting unlicensed contractors to criminal penalties and civil remedies. The civil remedies 'affect the unlicensed contractor's right to receive or retain compensation for unlicensed work.' The hiring party is entitled to enforce these remedies through a defensive 'shield' or an affirmative 'sword.' " (Alatriste, supra, 183 Cal.App.4th at p. 664.) The "shield" is contained in section 7031, subdivision (a). It 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." (Alatriste, supra, 183 Cal.App.4th at pp. 664-665.) Section 7031, subdivision (a), provides, "Except as provided in subdivision (e), 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 he or she was 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 . . . ." "The California Supreme Court has long given a broad, literal interpretation to section 7031, subdivision (a)'s shield provision. The court has held that section 7031, subdivision (a) applies even when the person for whom the work was performed knew the contractor was unlicensed. Additionally, unlicensed contractors are presumed to have knowledge of the law's requirements and a contractor cannot circumvent section 7031, subdivision (a) by alleging the beneficiary's false promise to pay despite the contractor's lack of licensure. " (Alatriste, supra, 183 Cal.App.4th at p. 665) "The high court also recently reconfirmed that 'section 7031, subdivision (a) bars a person from suing to recover compensation for any work he or she did under an agreement for services requiring a contractor's license unless proper licensure was in place at all times during such contractual performance.' The court explained that '"'section 7031 represents a legislative determination that the importance of deterring unlicensed persons from engaging in the contracting business outweighs any harshness between the parties, and that such deterrence can best be realized by denying violators the right to maintain any action for compensation in the courts of this state. . . .'"' (Alatriste, supra, 183 Cal.App.4th at p. 665) Section 7031's "sword" is the result of a 2001 amendment to the statute that added subdivision (b), which provides: "Except as provided in subdivision (e), 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." () "By adding this remedy, the Legislature sought to further section 7031, subdivision (a)'s policy of deterring violations of licensing requirements by 'allowing persons who utilize unlicensed contractors to recover compensation paid to the contractor for performing unlicensed work.' A legislative committee analysis stated the purpose of the measure was '"to address the recent case of Cooper v. Westbrook Torrey Hills, LP (2000) 81 Cal.App.4th 1294 . . . , in which the court, in an unpublished portion of the opinion, referred to section 7031, subdivision (a) prohibiting an unlicensed contractor from recovering fees, but not requiring any refund of compensation already paid to the contractor. . . . This measure is intended to clearly state that those using the services of unlicensed contractors are entitled to bring an action for recovery of compensation paid.'"" (Alatriste, supra, 183 Cal.App.4th at p. 666)