No License; No Claim; No Recovery: Oregon Contractors Beware!
Stellar J Corp. v. Smith & Loveless, Inc., 2010 WL 3118360 (D. Or. Aug. 5, 2010)
By: Tom Wolfendale, K&L Gates, Seattle
Overview:
A general contractor ("general") brought a claim, originally in state court, against one of its first tier subcontractors ("sub") for breach of contract; in turn, the first tier subcontractor removed the action to federal court and brought claims against the general and its surety for breach and quantum meruit.
On a public works project, the sub was to supply and install equipment for a city wastewater treatment project. At the time of contracting with the general, the sub did not have an Oregon Contractor’s license. During the work, the general terminated the sub for failure to perform. The sub counterclaimed alleging the general breached and also sued the general’s surety for recovery. The general asserted an affirmative defense that the sub did not have an Oregon license and could not prosecute its counterclaims.
The general contractor sought summary judgment against the sub claims based on the sub’s failure to obtain an Oregon license. The federal contract dismissed the sub’s claims.