SP CONTRACTING, INC. VS. HOUSTON, ET AL.

CASE NUMBER: 26CVG-00664 Tentative Ruling on Demurrer: Defendants Alex Houston and Desiree Houston demur to Plaintiff’s Second Cause of Action for Common Count – Quantum Meruit, pursuant to CCP § 430.10(e) on the ground that it fails to state facts sufficient to constitute a cause of action. Plaintiff opposes the demurrer.

This action arises out of the construction of a backyard swimming pool. The Complaint alleges that the parties entered into a written Bid Proposal for the construction of a pool on September 27, 2023. It further alleges the parties entered into an Extra Work Order on April 20, 2025. Plaintiff alleges it substantially performed, and that Defendants refused to pay a $30,903.75 installment payment.

Plaintiff’s Complaint, filed April 1, 2026, alleges two causes of action: 1) Breach of Contract, and 2) Common Count – Quantum Meruit (Reasonable Value of Work, Labor, and Materials). On July 29, 2026, Plaintiff dismissed the first cause of action for breach of contract. Only the second cause of action for quantum meruit remains.

“‘Quantum meruit refers to the well-established principle that “the law implies a promise to pay for services performed under circumstances disclosing that they were not gratuitously rendered.” [Citation.] To recover in quantum meruit, a party need not prove the existence of a contract [citations], but it must show the circumstances were such that “the services were rendered under some understanding or expectation of both parties that compensation therefor was to be made.”’ [Citation.]” (Miller v.

Campbell, Warburton, Fitzsimmons, Smith, Mendel & Pastore (2008) 162 Cal.App.4th 1331, 1344.) “The underlying idea behind quantum meruit is the law's distaste for unjust enrichment. If one has received a benefit which one may not justly retain, one should ‘restore the aggrieved party to his [or her] former position by return of the thing or its equivalent in money.’ [Citation.]” E. J. Franks Construction, Inc. v. Sahota (2014) 226 Cal.App.4th 1123, 1127-1128. 6

Defendant specially and generally demurs to Plaintiff’s Second Cause of Action for Common Count/Quantum Meruit pursuant to CCP 430.10(e) because “the alleged swimming pool contract fails to contain the terms and notices required by Cal. Bus. & Prof. Code §§ 7159 and 7167 rendering the alleged contract “void and unenforceable by the contractor as contrary to public policy.” (Cal. Bus. & Prof. Code § 7167(a).) Whether the contract is “void and unenforceable by the contractor” is relevant only to the breach of contract claim, which has been dismissed. To recover in quantum meruit, a party need not prove the existence of a contract. Defendant argues that noncompliance with section 7159 renders the services performed illegal and therefore prohibits Plaintiff from any recovery for materials and labor. This is not necessarily the case.

“The question of the effect of noncompliance with section 7159 was considered by our Supreme Court in Asdourian v. Araj (1985) 38 Cal.3d 276. In that case, a contractor sued the owner for the balance due on remodeling work performed on the owner's property. The owner argued that the contractor was barred by section 7159 from recovering for the completed work as it was done pursuant to oral agreements. The court rejected this argument, holding that an oral contract in violation of section 7159 is merely voidable and not void.

The court stated that the public policy interest underlying section 7159 is to encourage written contracts for home improvements in order to protect unsophisticated consumers. (Asdourian v. Araj, supra, 38 Cal.3d at pp. 290, 292.) Further, although there is a general rule that contracts made in violation of a regulatory statute are void, courts will not apply such rule in certain situations. For example, the rule will not be applied where the statutory penalties exclude by implication the additional penalty of holding the contract void. In addition, in compelling cases, where the defendant's unjust enrichment will result at the plaintiff's expense, courts will enforce illegal contracts. (Id., at pp. 291-292.)” Davenport & Co. v. Spieker (1988) 197 Cal.App.3d 566, 569.

The Asdourian Court also noted that “a contract made in violation of section 7159 does not involve the kind of illegality which automatically renders an agreement void. The contracts at issue here were not malum in se. They were not immoral in character, inherently inequitable or designed to further a crime or obstruct justice. (See Vitek, supra, 34 Cal.App.3d at p. 593.) There was nothing "intrinsically illegal" about the agreements between plaintiff and defendant to repair and remodel the residential property. Rather, the contracts were malum prohibitum, and hence only voidable depending on the factual context and the public policies involved. (Ibid.)” Asdourian, supra, 38 Cal.3d at p. 293.

The Court finds that Plaintiff has adequately stated facts sufficient to constitute a cause of action for quantum meruit. Defendant’s Demurrer as to the Second Cause of Action is OVERRULED. The proposed order will be modified.

IN RE: SYLVESTER