Arizona Court of Appeals Division One holds that a licensed contractor can pursue an action to recover the value of the licensed work even if the contractor also performed unlicensed work at the same time.

Armor Designs hired a licensed electrical contractor to perform work.  The contractor was licensed for some of the work, but not all of it.  Armor Designs refused to pay the contractor after that work was completed; the contractor sued for nonpayment.

Armor Designs moved for summary judgment, arguing that the contractor was barred from recovery because he had performed “significant work for which [he] had no license.”  The trial court granted summary judgement, and the contractor appealed.  The Court of Appeals vacated and remanded. 

Arizona law prohibits unlicensed contractors from bringing an action to recover payment for unlicensed work.  See A.R.S. § 32-1153.  This protection for the public prevents any recovery by unlicensed contractors even if concepts of equity might otherwise apply.  When the work performed includes tasks not covered by the license, Arizona courts have long held that a licensed contractor may recover payment for the licensed duties performed as long as the value of the contract can be apportioned between licensed and unlicensed work.

The Court also addressed whether A.R.S. § 32-1151, which makes it unlawful to engage in business or act in the capacity of a contractor without a license, bars the contractor’s claims.  The Court of Appeals distinguished the ability to seek recovery for licensed work after the fact from the requirement that a contractor must have all licenses required for the entire project under A.R.S. § 32-1151.  See City of Phoenix v. Superior Court, 184 Ariz. 435 (App. 1995).  It held that a person who is unlicensed to do any of the work at the time of contracting cannot seek recovery.  But if that person is licensed to perform some of the work, the contractor may seek recovery for that work. 

Presiding Judge Portley authored the opinion; Judges Gemmill and Brown concurred.