Jose Sifuentes, D/B/A Jose’s Electric v. D.E.C., LLC, Tennessee Court Of Appeals, 8/17/20.
A commercial tenant hired D.E.C. to construct a bowling alley. In turn, D.E.C. subcontracted with Jose Sifuentes to install electrical wiring, lighting, bowling alley equipment. Mr. Sifuentes owned and operated a sole proprietorship known as Jose’s Electric. D.E.C. agreed to pay Mr. Sifuentes an hourly rate for his company’s services. Ultimately, Mr. Sifuentes continued working on the job although D.E.C. failed to pay his weekly invoices along the way. Money got so tight for Mr. Sifuentes that he ended up liquidated his personal savings and retirement funds to pay his employees. Mr. Sifuentes finished the bowling alley on time but D.E.C. didn’t pay him for a substantial amount of work performed. Mr. Sifuentes’s unpaid invoices totaled $134,002.88. Mr. Sifuentes sued to recover his unpaid wages.
Ultimately, the result of this case hinged on the fact that it was discovered that Mr. Sifuentes was an unlicensed subcontractor. Although the Court rejected a more restrictive view that was proffered by the Defense, it did hold that, as an unlicensed contractor, the only damages that Mr. Sifuentes may recover are actual documented expenses established by clear and convincing evidence.
Further, the Court found that Mr. Sifuentes could not recover for breach of contract. The reason for this is that the Court found that the contract was “illegal,” as Mr. Sifuentes had entered into a contract to perform licensed services although he was not licensed. However, Mr. Sifuentes will be allowed to recover under a doctrine called quantum meruit. Essentially, that means that regardless of his status or the lack of a contract, Mr. Sifuentes should be compensated for the work that he completed.
Ultimately, the Court noted that this case did not create a statutory cause of action for unlicensed contractors under Tennessee Code Annotated § 62-6-103(b). Instead, an unlicensed contractor can recover only if he has a valid common law claim.
How much Mr. Sifuentes recovers remains yet to be seen. The trial court has to pinpoint what Mr. Sifuentes’s actual documented expenses are.
Half of this battle could have been avoided if Mr. Sifuentes was simply licensed. It is best practice to always make sure whether or not your profession requires a license and if so, always make sure that it is valid and up to date. Further, if you are a contractor on a job, make sure you have all needed permits to be able to complete the work you need to complete.
If you are a contractor or subcontractor who need help setting up a business entity, need help enforcing a contract, or need assistance recovering what you are owed, give us a call and let’s see if I can help you with your goals or needs.
