{"id":903604,"date":"2024-11-20T15:55:55","date_gmt":"2024-11-20T22:55:55","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=903604"},"modified":"2024-11-20T15:55:58","modified_gmt":"2024-11-20T22:55:58","slug":"compensation-guidance-for-unlicensed-contractors-exception","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/compensation-guidance-for-unlicensed-contractors-exception\/","title":{"rendered":"Utah Court of Appeals Provides Guidance on Exception to Bar Unlicensed Contractors From Suing to Collect Compensation"},"content":{"rendered":"\n<p>Mark Morris and Tyson Prisbrey | <a href=\"https:\/\/www.swlaw.com\/publication\/under-construction-november-2024\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Snell &amp; Wilmer<\/a><\/p>\n\n\n\n<p>Utah law provides that a contractor may not seek \u201ccollection of compensation\u201d in court for any work that requires a license if, at the time the contractor entered into the contract, the contractor was not licensed. The Utah Supreme Court has laid out four exceptions to this bar, one of which is if the&nbsp;<strong><em><u>owner<\/u>&nbsp;<\/em><\/strong>possesses skill or expertise in the field of work being provided, then the contractor may maintain a lawsuit to seek compensation. While no Utah court has definitively established the level of skill or expertise that the owner needs to possess to trigger this exception, the Utah Court of Appeals in&nbsp;<em>R4 Constructors v. InBalance Yoga<\/em>&nbsp;provided some guidance.<\/p>\n\n\n\n<p>The facts in&nbsp;<em>R4 Constructors<\/em>&nbsp;are relatively common and straight forward: InBalance Yoga hired R4 Constructors to build a yoga studio, terminated the contract with R4, and refused to pay R4 because of disputes over the quality of the work. R4 filed suit and one of InBalance\u2019s defenses was R4\u2019s lack of a contractor\u2019s license at the time of entering into the contract. R4 argued that as the owner, InBalance\u2019s principal acted as a general contractor in building two of her homes, that she built two additional homes, and that she was in charge of the schedule on this project. Thus, R4 argued, InBalance possessed sufficient \u201cskill or expertise in the field of work\u201d that triggered this exception to the statutory bar on unlicensed contractors seeking compensation. R4 moved for summary judgment urging that this exception applied, which the district court granted. InBalance appealed.<\/p>\n\n\n\n<p>The Court of Appeals reversed the trial court, holding that R4 did not satisfy the exception as a matter of law. Importantly, Utah courts have not determined what constitutes \u201cskill or expertise in the field\u201d to qualify for the exception. Here, the Court of Appeals found that the record was clear that InBalance\u2019s principal possessed&nbsp;<em>some<\/em>&nbsp;skills or expertise in the field given that, under the contract, she performed her own supervision of R4\u2019s work, she controlled the schedule, and she had previously acted as her own general contractor in building her own homes. The Court noted, however, that a factual question still remained as to whether the principal possessed&nbsp;<em>sufficient<\/em>&nbsp;skill or expertise. Because a jury could reasonably find that she did or did not have the requisite skill, the Court found that summary judgment was inappropriate.<\/p>\n\n\n\n<p>While the\u00a0<em>R4 Constructors<\/em>\u00a0Court did not set the boundaries for this exception, and now a jury is going to make the call, an owner\u2019s supervisory involvement in the project and prior experience in acting as a general contractor could be sufficient to allow an unlicensed contractor to maintain a lawsuit for its compensation in Utah.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes &#8211; please call Advise &amp; Consult, Inc. at 888.684.8305, or email <a href=\"mailto:experts@adviseandconsult.net\">experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Mark Morris and Tyson Prisbrey | Snell &amp; Wilmer Utah law provides that a contractor may not seek \u201ccollection of compensation\u201d in court for any work that requires a license if, at the time the contractor entered into the contract, the contractor was not licensed. The Utah Supreme Court has laid out four exceptions to&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/compensation-guidance-for-unlicensed-contractors-exception\/\">Continue reading <span class=\"screen-reader-text\">Utah Court of Appeals Provides Guidance on Exception to Bar Unlicensed Contractors From Suing to Collect Compensation<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[9,172],"tags":[9895,12107,224,27,106],"class_list":["post-903604","post","type-post","status-publish","format-standard","hentry","category-construction-contracts","category-construction-law-2","tag-advise-consult","tag-compensation","tag-construction-contract","tag-construction-law","tag-utah","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Utah Court of Appeals Provides Guidance on Exception to Bar Unlicensed Contractors From Suing to Collect Compensation - Advise &amp; 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