Here’s another case that blurs the line between civil and criminal laws.
It started as a civil dispute between a homeowner and contractor. The homeowner hired the contractor to paint her house and install ten windows. Six months later, he had painted her house and installed eight-and-a-half windows, but no one was happy. He wanted $8,000 more to finish the work, but she’d already paid him $61,000 and refused to pay more.
The contractor sued for the $8,000 balance, but he had a problem: apparently, he didn’t actually have a contractor’s license. Or he couldn’t produce a valid one, anyway.
He may not have realized that, in California, an unlicensed contractor can’t sue for a breach of contract no matter how good a job he may have done. Not only that but he can be sued for every penny that he was paid even if he did great work. Which is what happened here. The homeowner lawyered up and countersued for the $61,000 that she had paid him.
Then his luck got worse.
Because he couldn’t produce a contractor’s license, he was charged criminally with six misdemeanor counts of contracting without a license. Yes, it’s a crime, too. He pleaded no contest to one count, and the other six were dismissed. He was put on probation and ordered to pay restitution as part of it.
At the restitution hearing, the government demanded that he pay back the entire $61,000 that the homeowner had paid him plus her attorneys’ fees. He testified that he did the work right and that she owed him $8,000. She testified that he didn’t do it right because some of the paint had faded, chipped, bubbled, and peeled in the three years since. He argued that any damage was due to natural weathering because the house was so close to the ocean, and he called an expert who testified to that.
The trial court sided with the contractor, but on appeal, he was ordered to pay back everything, including her attorneys’ fees.
Why? The law was clear that he didn’t have a right to the money no matter how well he performed, so legally, she never should’ve had to pay for his work in the first place.
Wasn’t this a criminal case, not a civil one? Yes, but the civil rule applied to criminal restitution.
Wasn’t this an unfair windfall for the homeowner? Perhaps.
But that’s the way the cookie crumbled.
Update: On August 22, 2017, a higher appeals court reversed this decision. It held that the civil rule doesn’t apply to criminal restitution, which is limited to a victim’s actual economic loss. And with that, all is right in the world again.