So when I heard about a recent California court case about an unlicensed contractor who took a job from a Native American tribe and was then sued by the tribe for failure to comply with state law, I knew the contractor was in trouble.
Last month, in Twenty-Nine Palms Enterprise Corp v. Bardos, the Fourth District Court of Appeals in San Bernardino County, CA, granted summary judgment in favor of Palms and ruled against Paul Bardos, the unlicensed contractor and his company.
The plaintiff is Twenty-Nine Palms Band of Mission Indians, which is a federally recognized Indian tribe. The tribe is sovereign, residing on its reservation in the Coachella area. Palms is a tribal corporation wholly owned and operated by the tribe. Palms owns and operates the Spotlight 29 casino. Palms and the casino are on the tribe’s land in the Coachella area.
The defendant is Cadmus Construction Co. (Cadmus), a sole proprietorship wholly owned and operated by Paul Bardos.
The plaintiff sued Cadmus to recover $750,000 paid to Cadmus for constructing a road and parking lot for a casino. The plaintiff said Cadmus was unlicensed at the time of the work and was engaging in unfair competition because the company allegedly performed work requiring a contractor’s license while unlicensed.
The plaintiff’s complaint states that:
On or about March 12, 2007, Cadmus submitted a written bid proposal to construct a temporary access road and parking lot for the casino. The bid was in the amount of $751,995. Palms accepted Cadmus’s bid. Cadmus performed the work on the tribe’s land, where the casino is located. Cadmus finished its work and was paid in full around May 2007; Palms paid Cadmus $751,995.
Cadmus first received its contractor’s license in October 2007. When Cadmus entered into the construction contract and performed the construction work, it was not a licensed contractor. Palms sought to have Cadmus disgorge the $751,995.
Bardos denied that his company was unlicensed at the time. The tribal corporation allegedly told Bardos that their land was sovereign and not subject to state laws, and because of this the contractor assumed he could work on the land without complying with California contracting law. But apparently he was wrong.
The tribe may not be subject to some state laws because of sovereign status, but contractors who perform work on the land are required by law to be licensed.
The California’s Business & Professions Code Section 7031, subdivision (b), says “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.”In this case, the plaintiff now has a judgment to get reimbursed the $751,000 that it paid Cadmus, even though the quality of the work performed was never at issue.
This case is a pretty expensive warning to all unlicensed contractors thinking of working on tribal lands in California. Sovereignty is one thing, but it doesn't take the place of California's all-powerful contractor laws and codes.