Opp v. St. Paul Fire & Marine Ins. Co

In Opp v. St. Paul Fire & Marine Ins. Co. (2007) 154 Cal.App.4th 71, a subcontractor, Mountain Connection, Inc. (MCI), sued on a payment bond. When the defendant asserted MCI was not a licensed contractor, MCI filed an amended complaint substituting as plaintiff " 'William Opp dba Mountain Connection and Mountain Connection, Inc.' " (Opp, supra, 154 Cal.App.4th at p. 73.) After the defendant obtained summary judgment, William Opp argued on appeal that the trial court erred because the evidence showed that he had placed his personal contractor's license number on the contract, supervised most of the work, and the general contractor "dealt with him as a sole proprietor, doing business under the name of Mountain Connection, Inc." (Id. at p. 74.) The Opp court rejected these arguments. It noted that section 7031 is not directed toward who actually " 'did the work,' " but who was " 'engaged in the business or acting in the capacity of a contractor.' " (Opp, supra, 154 Cal.App.4th at p. 75.) It concluded that the undisputed evidence revealed that MCI was the contracting party because William Opp signed the contract "as president of MCI." (Id. at p. 76.) Accordingly, the suit was barred by section 7031. (Opp at p. 75.) The court rejected the suggestion that William Opp could be considered a party to the contract simply because he used his individual license on the contract, observing: "Such a rule would violate at least three aspects of public policy. First, of course, it would render ineffective the contractor's license requirement and encourage fraud if insertion of the license number of one who is not the contractor permitted a suit that otherwise was barred by section 7031. Second, in this case it would be tantamount to permitting an individual to adopt a prohibited fictitious business name and then to sue on a contract, when such suit would be barred for any other unregistered business. Finally, 'parties who determine to avail themselves of the right to do business by means of the establishment of a corporate entity must assume the burdens thereof as well as the privileges.' An individual who has obtained the benefits of corporate limited liability will not be permitted to repudiate corporate existence just because the corporation has become an inconvenience." (Opp, supra, 154 Cal.App.4th at p. 76.)