Dobson v. Archibald — freecase.ai

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Dobson v. Archibald

NOTICE: SLIP OPINION (not the court’s final written decision)

IN THE SUPREME COURT OF THE STATE OF WASHINGTON

MONTOYA-LEWIS, J.— In order to protect the public, the Washington State

Legislature passed a law requiring contractors to register with the Department of

Labor and Industries before advertising, offering to do work, or performing any work

as a contractor. RCW 18.27.020. In so doing, the legislature has stated an interest

in protecting the public from unreliable, fraudulent, financially irresponsible, or

incompetent contractors. RCW 18.27.140. Consequently, in any action where an

individual doing work as a contractor sues for breach of contract for work done as a

contractor, that individual is required to allege and prove that at the time they

performed the work, they were a registered contractor. RCW 18.27.080.

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In this case, a homeowner, Trefan Archibald, hired an individual, Gina

Dobson, to refinish his hardwood floors. Dobson worked as a longshoreman full-

time but did some construction work on the side. Archibald selected her for the job

based on a referral and her reputation of completing similar construction projects.

Upon completion of the floors, Archibald was dissatisfied with the results and

refused to pay the agreed-upon price. Dobson sued for breach of contract and, as

part of the suit, claimed she was not a contractor and did not need to be registered.

We are asked to determine two issues. First, whether such an individual is a

“contractor” under RCW 18.27.010(1)(a). Second, whether nonregistration under

RCW 18.27.080 is an affirmative defense that must be timely pleaded or is otherwise

waived.

The Court of Appeals held that Dobson was a contractor within the meaning

of the contractor registration statutes and that Archibald was not required to raise

nonregistration as an affirmative defense. We agree. We hold that Dobson is a

contractor as defined by statute and that registration is a prerequisite to suit.

Therefore, Dobson was precluded from bringing this lawsuit, and her breach of

contract action was properly dismissed. We affirm.

I. FACTS AND PROCEDURAL HISTORY

A. Factual Background

Dobson works as a longshoreman, loading and unloading ships at the Port of

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Seattle’s seaport terminals. Over the last few years, Dobson has simultaneously

completed home repair work for pay on several occasions. Dobson never registered

as a contractor with the Department of Labor and Industries.

In 2018, Archibald, a homeowner in the Seattle area, contacted Dobson to

inquire about refinishing hardwood floors in his home. Archibald learned about

Dobson through a mutual friend; they never had any prior interactions. In 2016,

Dobson had done some work for this friend, such as remodeling his guest bathroom

and miscellaneous in-home repairs and construction work.

Dobson has acquired customers for her home repair work through a referral

process. For instance, Archibald’s friend was referred to Dobson by a second friend

for whom Dobson had also refinished hardwood floors and done some other

construction work. This second friend was referred to Dobson by Dobson’s realtor.

Impressed by improvements Dobson made to her own home, the realtor occasionally

asked Dobson to perform repairs or improvements for the houses she was listing.

When Archibald and Dobson began discussing the hardwood refinishing

project, Archibald asked about Dobson’s work experience. Dobson explained that

she did this type of construction and repair work when not working full time as a

longshoreman, though it is unclear whether she ever claimed to be registered as a

contractor. Archibald specifically wanted Dobson to use a Rubio Monocoat finish

for the project. Dobson had never used that finish before. She typically used

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polyurethane finish, which is applied using a very different procedure. Despite her

inexperience, Dobson agreed to use Rubio Monocoat at Archibald’s insistence.

Archibald claims that Dobson was not forthcoming about her lack of experience with

the requested finish.

While Archibald was looking for someone to refinish his floors, he also got a

quote from a professional company for $4,321.40, which appears to include the costs

of preparation and materials in the approximate amount of $1,000.00. Archibald

chose to hire Dobson, and they agreed that Dobson would do the work for $3,200.00.

Archibald paid Dobson a $700.00 deposit before the work began, and he purchased

the materials for the job for $579.22. The $700.00 deposit was factored into the

$3,200.00 total, but the $579.22 for the cost of materials was not—this was

additional money out of Archibald’s pocket.

Dobson completed the work during her off-hours from working as a

longshoreman. When Dobson finished the project, Archibald was unhappy with the

appearance of the floors and refused to pay the remaining $2,500.00 of the agreed-

upon price.

B. Procedural History

Dobson filed suit against Archibald for breach of contract. In her complaint,

Dobson alleged that she is not a contractor and did not need to be registered.

Archibald moved for summary judgment, asserting that as an unregistered

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contractor, Dobson could not bring suit under RCW 18.27.080. Dobson then filed a

cross motion for summary judgment, arguing, in part, that failure to register is an

affirmative defense that Archibald waived. Archibald later amended the answer to

include Dobson’s status as an unregistered contractor as an affirmative defense. The

court granted Archibald’s motion to amend his answer and Archibald’s motion for

summary judgment, denied Dobson’s cross motion for summary judgment, and

dismissed the case with prejudice.

The Court of Appeals affirmed the trial court, holding that Dobson was a

contractor within the meaning of contractor registration statutes and that Archibald

was not required to raise Dobson’s nonregistration as an affirmative defense.

Dobson v. Archibald, 21 Wn. App. 2d 91, 92, 505 P.3d 115 (2022). We granted

review. 199 Wn.2d 1026 (2022).

II. ANALYSIS

We review the grant of a motion for summary judgment de novo. Benjamin

v. Wash. State Bar Ass'n, 138 Wn.2d 506, 515, 980 P.2d 742 (1999). Summary

judgment is appropriate when there is no genuine issue of material fact and the

moving party is entitled to judgment as a matter of law. CR 56(c). All evidence

must be viewed in the light most favorable to the nonmoving party. Clements v.

Travelers Indem. Co., 121 Wn.2d 243, 249, 850 P.2d 1298 (1993).

Whether Dobson qualifies as a contractor and whether her nonregistration

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constitutes an affirmative defense are questions of statutory interpretation. Statutory

interpretation is a question of law we also review de novo. Dep’t of Ecology v.

Campbell & Gwinn, LLC, 146 Wn.2d 1, 9, 43 P.3d 4 (2002). In interpreting statutes,

our “objective is to ascertain and carry out the Legislature’s intent.” Id. We discern

the plain meaning by considering the language of the statute and related statutes. Id.

at 11. If the statute is ambiguous, we then refer to legislative history and other aids

to construction. Id. at 12. If the plain meaning cannot be determined from the

statutory provision at issue, the court considers the statutory scheme as a whole, or

related statutes. Id. at 10. It is also well established that ‘“[t]he drafters of legislation

. . . are presumed to have used no superfluous words and we must accord meaning,

if possible, to every word in a statute.”’ In re Recall of Pearsall-Stipek, 141 Wn.2d

756, 767, 10 P.3d 1034 (2000) (alterations in original) (quoting Greenwood v. Dep’t

of Motor Vehicles, 13 Wn. App. 624, 628, 536 P.2d 644 (1975)).

A. Qualifying as a Contractor

As a threshold matter, we must establish whether Dobson is a contractor.

After applying the statutory rules of construction and our standards of review, we

hold that Dobson qualifies as a contractor under RCW 18.27.010(1)(a). The

legislature defines the term, as well as the reasons for requiring registration, and this

case falls squarely within the terminology used in the statute and the basis for it.

The legislature requires contractors to register with the Department of Labor

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and Industries before advertising, offering to do work, or performing any work as a

contractor. RCW 18.27.020. The purpose of this requirement is “to afford

protection to the public” from “unreliable, fraudulent, financially irresponsible, or

incompetent contractors.” RCW 18.27.140; Nw. Cascade Constr., Inc. v. Custom

Component Structures, Inc., 83 Wn.2d 453, 460, 519 P.2d 1 (1974). The registration

act requires strict enforcement. RCW 18.27.005.

“Contractor,” as defined by RCW 18.27.010(1)(a), is

(Emphasis added.)

Rather than attempting to interpret who qualifies as a contractor in a vacuum,

we read RCW 18.27.010(1)(a) in conjunction with the other sections of chapter

18.27 RCW to provide context. Campbell & Gwinn, 146 Wn.2d at 12. For instance,

RCW 18.27.080 states that any person “engaged in the business or acting in the

capacity of a contractor” is prohibited from suing for breach of contract for

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performance of work if they are not registered as a contractor. (Emphasis added.)

The legislature distinguishes between individuals engaged in the business of a

contractor and those “acting in the capacity of a contractor.” Id. The legislature’s

choice to include not only those who are engaged in the business of contracting but

also those acting in the capacity of a contractor indicates the legislature’s intent to

capture those who do the type of work described under .010(1)(a) both formally and

informally. See, e.g., Pearsall-Stipek, 141 Wn.2d at 767 (we must give effect to all

language in the statute).

Further, RCW 18.27.010(14) defines an “unregistered contractor” as a person

“doing work as a contractor without being registered in compliance with this

chapter.” The legislature’s choice to frame an unregistered contractor in terms of

the work being done rather than whether it is an official business further indicates

the legislature’s intent to capture those who do the type of work described under

.010(1)(a). It is undisputed in the record that Dobson is unregistered, and in looking

at the plain language of the statute as a whole, Dobson is a person who—in acting

in the capacity of a contractor—undertook the project of refinishing Archibald’s

hardwood floors in his home. 1

The Court of Appeals has previously addressed the question of who qualifies

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as a contractor under RCW 18.27.010, .080 in Rose, looking to the facts and

circumstances to determine whether someone was engaged in the business or acting

in the capacity of a contractor. Rose v. Tarman, 17 Wn. App. 160, 561 P.2d 1129

(1977). Those factors, adaptable to differing circumstances, comport with the plain

language of the statute by focusing on whether an individual is acting in the capacity

of a contractor from the formation of the agreement through the performance of the

work. There, Rose agreed to provide bulldozing services in clearing Tarman’s

property. Id. at 161. The Court of Appeals held that contractor registration statutes

were inapplicable based on consideration of the following five specific facts. Id. at

163. First, prior to forming this agreement, Rose had been social friends with

Tarman for five years, and they were far removed from a typical business enterprise.

Id. Second, Rose performed the bulldozing services during odd hours in the

evenings and during his spare time on weekends. Id. Third, the agreed-upon price

for performance was far below the going rate for similar work. Id. Fourth, Rose did

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not hold himself out to the public as a bulldozer operator. Id. Finally, Tarman was

the person to actively solicit a contract with Rose. Id.

Today, we adopt the Rose court’s analysis as a rule. In determining whether

or not an individual is a contractor in the pursuit of an independent business, the

court considers (1) the nature of the relationship with the client, (2) the time of

performance, (3) the agreed-upon price for performance and whether it is

substantially below the going rate for similar work, (4) the public perception of the

individual’s role in performing such work, and (5) which party solicits the contract.

On balance, we find that these factors weigh in favor of Dobson qualifying as a

contractor. While the second and fifth factors weigh against Dobson being a

contractor, the remaining three factors weigh strongly in favor of such a finding.

As to the first factor, Dobson and Archibald have a referral-based,

businesslike relationship. Dobson and Archibald were not even acquaintances, let

alone social friends. The only way they got in touch was through a referral from one

of Dobson’s and Archibald’s mutual friends. However, there is no indication that

friendship or any relationship beyond this transaction developed between Dobson

and Archibald, and the referral was strictly based on the similar home repair work

Dobson had done for the friend. The professional, rather than personal, nature of

this relationship weighs in favor of Dobson being a contractor.

As to the third factor, the price of performance is substantially within the

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going rate for similar work. Specifically, Dobson and Archibald agreed on

$3,200.00 for the price of performance. However, Archibald was also responsible

for purchasing the materials to refinish the floors, which cost $579.22. Therefore,

the total cost of the project was $3,779.22. The quote from the professional company

indicated that it would have charged $4,321.40, which appears to include the cost of

preparation and materials in approximately the amount of $1,000.00. Thus, the

comparative costs excluding preparation and materials were $3,200.00 for Dobson

and approximately $3,321.40 for the professional company and including

preparation and materials, $3,779.22 for Dobson and $4,321.40 for the professional

company. Therefore, we conclude that the agreed-upon price of performance for

Dobson’s work is not substantially below the going rate for similar work.

Moreover, additional benefits may have been included in the price for the

professional company. First, the professional company would have provided the

convenience of handling the purchase and organization of all materials and

preparation of refinishing the floors. Second, while Dobson had never before used

the Rubio Monocoat finish, no facts in the record suggest that this professional

company also lacked experience with the requested finish. Thus, the professional

company’s costs also may have included a greater level of experience and

confidence using that finish. As a result, we conclude that the agreed-upon price of

performance with Dobson is not substantially below the going rate for similar work,

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which weighs in favor of Dobson being a contractor.

As to the fourth factor, Dobson held herself out to the public as a contractor.

Though the parties dispute whether Dobson represented that she was a registered

contractor, Dobson took on home repair work for pay based on referrals by previous

clients. Even in viewing the facts in the light most favorable to Dobson, she was

earning money for construction work she got based on referrals by other people she

had worked for, beginning with a realtor with whom Dobson had a professional

relationship. The realtor was impressed by the improvements Dobson had made to

her own home, so she asked Dobson on multiple occasions to perform repairs or

improvements for the houses she was listing. This was a business relationship

between two professionals that laid the foundation for the chain of referrals leading

to Archibald. The public is likely to believe that someone who gets work based on

these business relationships and referrals from other clients is in fact a contractor.

Only the second and fifth factors weigh against finding Dobson a contractor.

As to the second factor, Dobson refinished Archibald’s hardwoods during her off

time from working as a longshoreman. As to the fifth factor, Archibald initiated

contact with Dobson. Balancing all of the factors together, we hold that Dobson is

a contractor.

This fact-specific analysis is consistent with the legislature’s stated intended

purpose for chapter 18.27 RCW. See, e.g., Campbell & Gwinn, 146 Wn.2d at 9

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(“The court’s fundamental objective is to ascertain and carry out the Legislature’s

intent.”). Namely, the purpose of the chapter is “to afford protection to the public

including all persons, firms, and corporations furnishing labor, materials, or

equipment to a contractor from unreliable, fraudulent, financially irresponsible, or

incompetent contractors.” RCW 18.27.140. Since the stated purpose of the

registration act is indeed to prevent fraud against the public, even a single and

isolated business venture is not exempt from registration requirements. Nw.

Cascade Constr., Inc., 83 Wn.2d at 459. Dobson engaged in multiple contractor

jobs ranging from in-home repairs to refinishing floors to entirely remodeling a

bathroom. She had multiple clients, who relied on her quality of service through a

referral process. Failing to recognize that these circumstances constitute “acting in

the capacity of a contractor” would be contrary to the intent of the registration statute

to protect the public. RCW 18.27.080; see also Nw. Cascade Constr., Inc., 83 Wn.2d

at 460.

As a result, we affirm the Court of Appeals decision. We hold that Dobson is

a contractor within the meaning of contractor registration statutes.

B. Registration as a Prerequisite to Suit

Since Dobson was required to register as a contractor, we must also determine

whether registration is a prerequisite to suit or whether nonregistration is an

affirmative defense. If failure to register precludes the contractor from bringing the

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suit, then the plaintiff-contractor must allege and prove that they either registered or

are not required to register. If nonregistration is an affirmative defense, then the

defendant-customer must timely raise it or it is otherwise waived. We hold that the

registration requirement is a prerequisite to suit; thus, since Dobson was required to

the contract.

RCW 18.27.080 is titled “Registration prerequisite to suit.” (Emphasis

added.) In this section, the legislature requires contractors to show that they are

registered in order to bring a breach of contract action. Specifically, RCW 18.27.080

provides that

(Emphasis added.) In other words, contractors in Washington can sue clients only

to recover compensation or for breach of contract if the contractor is properly

registered, and the contractor holds the burden to allege and prove their registration.

Coronado v. Orona, 137 Wn. App. 308, 311, 153 P.3d 217 (2007). Failure to register

bars the contractor from bringing the suit at all. This section is in derogation to the

common law and must be strictly construed. Andrews Fixture Co. v. Olin, 2 Wn.

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App. 744, 749, 472 P.2d 420 (1970). The effect of nonregistration under this statute

is that the contractor cannot recover in court, not that the contract is rendered void

or illegal. Davidson v. Hensen, 135 Wn.2d 112, 127, 954 P.2d 1327 (1998); Bort v.

Parker, 110 Wn. App. 561, 571, 42 P.3d 980 (2002). The plain language of the

statute identifies registration as a prerequisite to sue.

There is no indication anywhere in chapter 18.27 RCW that nonregistration is

an affirmative defense that could be waived. However, Dobson contends that this is

the case and that Archibald waived it by neglecting to timely plead nonregistration

as a defense. Dobson’s confusion stems from two prior decisions that reference

affirmative defense in dicta. We decline to adopt that dicta in our holding.

First, in Davidson, this court stated in dicta that “nonregistration is more akin

to an affirmative defense than a jurisdictional issue” because it limits enforceability

of a contract rather than rendering a contract illegal and void. Davidson, 135 Wn.2d

at 130-31. But we did not hold that nonregistration is in fact an affirmative defense;

rather, we held that because nonregistration does not render the contract illegal, there

was no ground for judicial review of an arbitration award based on illegality of

contract. Id. at 126-27.

Second, in Bosnar, the Court of Appeals held that when a contract involves

an employer/employee relationship with “attempts to work around the contractor

registration problem,” the suit is not barred on the basis of nonregistration. Bosnar

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v. Rawe, 167 Wn. App. 509, 512-13, 273 P.3d 488 (2012). The Court of Appeals

also noted, based on Davidson, that the owner “failed to properly assert RCW

18.27.080,” but it did so under the incorrect assumption that the Davidson court held

RCW 18.27.080 was an affirmative defense. See id. at 512-13, 510. Moreover, the

question of which party must raise the issue of registration was not dispositive to the

conclusion in Bosnar that the district court did not err in finding RCW 18.27.080

inapplicable to a contract between an employer and employee. Id. at 510. Neither

of these cases held that nonregistration is an affirmative defense.

We rely on the plain meaning of the statute. RCW 18.27.080 states that

registration is a prerequisite to suit and is intended to ensure anyone acting in the

capacity of a contractor registers with the state or forfeits the right to sue to enforce

a contract on the basis of nonpayment. Dobson did not fulfill the prerequisite to

Finally, Dobson misinterprets Civil Rule 8(c) as support for the assertion that

the registration statute is an affirmative defense. CR 8(c) requires affirmative

defenses such as “illegality” to be set forth in the pleadings. However, as we have

explained, a contractor’s failure to comply with registration requirements does not

render the underlying contract illegal or void, but rather it “merely limits its

enforceability for public policy reasons.” Bort, 110 Wn. App. at 571; Davidson, 135

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Wn.2d at 127. Thus, CR 8(c)’s requirement for affirmatively pleading illegality as

a defense is inapplicable.

Consequently, we affirm the Court of Appeals. We hold that registration

under RCW 18.27.080 is a prerequisite to suit, and nonregistration is not an

affirmative defense that must be timely pleaded or otherwise waived. Since Dobson

did not fulfill the prerequisite of registering as a contractor, she is barred from suit

for this breach of contract action.

C. Attorney Fees

Neither party is entitled to an award of attorney fees and costs on appeal. RAP

18.1. Though Archibald is the prevailing party, he is not entitled to attorney fees

because he failed to request attorney fees from the Court of Appeals in his opening

brief. RAP 18.1(a)-(b), (j). Dobson is not entitled to attorney fees either because

she is not the prevailing party. RAP 18.1(a)-(b).

III. CONCLUSION

The legislature intended to protect the public from individuals who acted in

the capacity of a contractor but failed to follow the law requiring them to register as

contractors with the state. As the legislature laid out clearly, this statute seeks to

protect the public from “unreliable, fraudulent, financially irresponsible, or

incompetent” contractors. RCW 18.27.140. Based on the complaint and answer in

this case, Dobson acted as a contractor but failed to register as one. Therefore,

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Dobson was barred from bringing suit for breach of contract and such action was

properly dismissed. We also decline to award attorney fees and costs to either party

on appeal. Accordingly, we affirm and remand to the trial court for further

proceedings consistent with this opinion.

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WE CONCUR:

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