Ranchwood Communities Limited Partnership v. Jim Beat Construction Co

In Ranchwood Communities Limited Partnership v. Jim Beat Construction Co. (1996) 49 Cal.App.4th 1397, two condominium homeowners' associations brought a construction defects lawsuit against the developer/contractors for the projects. The developer/contractors cross-complained against their subcontractors alleging various contract and tort causes of action. Neither developer/contractor was licensed or exempt from licensing requirements. Ranchwood concludes that the contract-based causes of action were unenforceable because they arose from illegal construction contracts entered into by unlicensed contractors. (Ranchwood, supra, 49 Cal.App.4th at p. 1417.) Ranchwood acknowledges that the developer/contractors sought damages from non-performing subcontractors, not "compensation for their work from the property owners (here, themselves) or from the buyers of the property (plaintiff-homeowners)." (Id. at p. 1410.) However, the developer/contractors were seeking to recover money concerning the performance of contracting services, and there would have been no contracting services but for the illegal subcontracts. (Id. at p. 1417.) The licensing status of the developer/contractors was "inseparable" from the causes of action for breach of the subcontracts so that "recovery on those subcontracts . . . cannot be sought by the unlicensed general contractors." ( Id. at p. 1418.)