Vitek, Inc. v. Alvarado Ice Palace, Inc

In Vitek, Inc. v. Alvarado Ice Palace, Inc. (1973) 34 Cal. App. 3d 586, a contractor sued for sums due under a construction contract. The contractor was not licensed on the date the contract was executed, but was licensed when payments were made and work was done. The Court held that section 7031, which prohibited "the bringing or maintaining of any action for collection of compensation for the performance of any act or contract for which a license is required without alleging and proving that the person was a duly licensed contractor at all times during the performance of such act or contract" did not bar the contractor's recovery. ( Id. at p. 590.) The court reasoned that "When the contractor is licensed at the time of execution of the contract and other factors in furtherance of the statutory purpose are present, the courts have often applied a doctrine of substantial compliance to excuse the contractor from having a license 'at all times during performance' where the contractor was otherwise qualified and inequity would occur if section 7031 were strictly applied." (Ibid.) The Court also declined to find that the contract was illegal, and thus void, under a statute which made it unlawful for a person to engage in the business of a contractor without having a contractor's license. The Court based that ruling on the fact that the Legislature had already set forth the penalties for violation of the statue. ( Id. at p. 591.)