The Supreme Court of Washington, in a February 9 decision, applied a balancing test to determine whether a laborer involved in a lawsuit was a contractor subject to state licensure requirements. Under Washington law, contractors must be registered with the state to sue for breach of contract.
Gina Dobson, the unlicensed contractor who was the focus of the case, works as a longshoreman, doing home repair work on the side without a contractor license. In 2018, a client hired Dobson to refinish his hardwood floors but, following the completion of the job, the client was unhappy and refused to pay Dobson. She filed suit for breach of contract and, after two adverse decisions against her, the case eventually reached the Washington Supreme Court, which affirmed the decisions of the lower courts.
In Washington, a contractor must possess proper licensure in order to file suit for breach of contract. To get around that registration requirement, Dobson claimed that she was not, in fact, a contractor subject to licensure requirements. The justices of the Court disagreed, holding that Dobson was a contractor subject to licensure requirements. Looking at the activities listed under the definition of “contractor” in Washington law and noting that the definition of “unregistered contractor” is simply a person who does the work of a contractor but is not registered with the state, Justice Raquel Montoya-Lewis wrote that the state “legislature’s choice to frame an unregistered contractor in terms of the work being done” indicated that the definition was broad, and that the definition encompassed the flooring work done by Dobson for the client.
The court adopted the reasoning of an earlier Washington Court of Appeals case as the statewide rule for determining whether a person meets the definition of a contractor. “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.” The justices then held that the balance of these factors indicated that Dobson was an unregistered contractor.
“Dobson engaged in multiple contractor jobs ranging from in-home repairs to refinishing floors to entirely remodeling a bathroom,” wrote Justice Montoya-Lewis. “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 18.27.010(1)(a), defining “contractor”:
Any person, firm, corporation, or other entity who or which, in the pursuit of an independent business undertakes to, or offers to undertake, or submits a bid to, construct, alter, repair, add to, subtract from, improve, develop, move, wreck, or demolish any building, highway, road, railroad, excavation or other structure, project, development, or improvement attached to real estate or to do any part thereof including the installation of carpeting *1194 or other floor covering, the erection of scaffolding or other structures or works in connection therewith, the installation or repair of roofing or siding, performing tree removal services, or cabinet or similar installation; or, who, to do similar work upon his or her own property, employs members of more than one trade upon a single job or project or under a single building permit except as otherwise provided in this chapter.