Harry Berenter, Inc. v. Berman

In Harry Berenter, Inc. v. Berman, 258 Md. 290, 265 A.2d 759 (1970), a construction company was not licensed under the Maryland Home Improvement Law when it entered a home improvement contract. At the time, the statute provided: No person may engage in or transact any home improvement business, or hold himself out to the public as doing home-improvement business, or offer to transact any home-improvement business without the required license.Berenter, 258 Md. at 294 (citing Md. Code (1957), Art. 56 246). At some point, the construction company attempted to establish a mechanics' lien on the homeowner's property. The Court held that the Home Improvement Law was a regulatory statute, and the construction company's failure to obtain the necessary license rendered the contract unenforceable. As a result, the Court refused to permit the construction company to enforce a mechanics' lien. See id. at 296. The language utilized in Berenter is broad and, potentially, could require a contract to be held unenforceable for any violation of a regulatory statute, absent express direction from the legislature "that such contracts would be legal and enforceable." Id. at 298-99. Harry Berenter, Inc. attempted to enforce a mechanic's lien in the Circuit Court for Montgomery County against the property of Phillip G. and Toby Berman. 258 Md. at 291. In that case, the contractor who performed the home improvement work was not licensed under the Maryland Home Improvement Law. Id. In the Harry Berenter case, the Court of Appeals, relying upon Goldsmith v. Manufacturers' Liability Ins. Co., 132 Md. 283, 103 A. 627 (1918), and later Maryland cases, held that the Maryland Home Improvement Law is a regulatory statute enacted for the protection of the public and not merely a revenue measure. 258 Md. at 294. The Court of Appeals then said: Berenter, Inc. earnestly contends that because the enforcement of a mechanic's lien is involved in an equity court, the rule against the enforcement of contracts by unlicensed persons under regulatory laws should not apply. In our opinion, even though the mechanic's lien is created by statute, nevertheless such a lien is provided for the enforcement of a contract for work done and materials furnished, Code (1957), Art. 63, 1, 19. The same public policy is involved in regard to this remedy as is present in regard to other remedies to enforce contracts. It is also clear that courts of equity will not lend their aid to enforce an illegal contract, 3 Pomeroy, Equity Jurisprudence (5th Ed.), 940, p. 728. The appellant Berenter, Inc., also argues that unless the mechanic's lien is enforced, the Bermans will be "unjustly enriched to no small extent." However, as we said in Thorpe v. Carte, supra, quoting from 2 Restatement, Contracts, 598, comment a: The court's refusal is not for the sake of the defendant, but because it will not aid such a plaintiff. Nor is the contention that there is unjust enrichment of the defendants tenable. To permit a recovery on a quantum meruit would defeat and nullify the statute. Northen v. Elledge, 72 Ariz. 166, 232 P. 2d 111 (1951); Lewis & Queen v. N. M. Ball Sons, 48 Cal.2d 141, 308 P. 2d 713 (1957). (Berenter, 258 Md. at 296.)