This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.
Facts
The Plaintiff hired the Defendant, an unlicensed contractor, to construct a trailer park on her property under an oral agreement. The Defendant was to perform tasks including sewer and water line installation, grading, leveling, excavation, and backfilling for a contract price of $4,916.53. The Plaintiff paid $4,898.00 before the work was completed. The Defendant's work failed to meet governmental standards, resulting in the trailer park failing inspection. The Plaintiff hired other contractors to correct the work at a cost of $7,124.93.
Procedural History
- Trial court: Found in favor of the Plaintiff, awarding $7,124.93 for corrective work, $2,000.00 as a partial refund, and $250.00 in costs. Denied prejudgment interest, lost rental income, and full recovery of costs.
Parties' Submissions
- Defendant: Argued that he was an employee, not a contractor, and thus exempt from licensing requirements. Contended that the trial court erred in finding a breach of implied warranty and awarding a refund, claiming it constituted double recovery.
- Plaintiff: Asserted that the Defendant breached the contract, implied warranty, and was negligent. Sought full refund of payments made to the unlicensed contractor, prejudgment interest on a loan, lost rental income, and full recovery of costs.
Legal Issues
- Was the Defendant an employee or an unlicensed contractor required to obtain a license?
- Did the Defendant breach an implied warranty?
- Can the Plaintiff recover payments made to an unlicensed contractor?
- Was the Plaintiff entitled to prejudgment interest on her loan?
- Was the Plaintiff entitled to damages for lost rental income?
- Was the Plaintiff entitled to full recovery of her costs?
Disposition
- The trial court's findings on the Defendant's status as a contractor, breach of implied warranty, and denial of lost rental income were affirmed.
- The trial court's partial refund award was reversed, and the Plaintiff was entitled to a full refund of $4,898.00.
- The denial of prejudgment interest was reversed and remanded for further proceedings.
- The trial court's award of $250.00 in costs was affirmed.
Reasons
Per Franchini J. (Ransom and Baca JJ. concurring):
- Defendant's Status: The court upheld the trial court's finding that the Defendant was not an employee but an unlicensed contractor. Evidence showed the Defendant did not receive wages or submit tax forms, and his work required a contractor's license under New Mexico law.
- Implied Warranty: The court affirmed the trial court's finding of a breach of implied warranty, noting that tradesmen are required to perform work in a skilled and workmanlike manner under common law. The Defendant's work failed to meet this standard.
- Refund of Payments: The court reversed the partial refund award, holding that public policy prohibits unlicensed contractors from retaining payments made under illegal contracts. The Plaintiff was entitled to a full refund of $4,898.00, even though she knew the Defendant was unlicensed.
- Prejudgment Interest: The court found that the trial court erred in denying prejudgment interest without weighing the equities. The case was remanded for a determination of the date of breach and calculation of interest.
- Lost Rental Income: The court affirmed the trial court's denial of damages for lost rental income, finding the Plaintiff's evidence too speculative to establish damages with reasonable certainty.
- Costs: The court upheld the trial court's discretion in awarding $250.00 in costs, finding no abuse of discretion.
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