A general contractor and owner entered a contract for repairs to the building. The work orders listed a contractor’s license number. The owner terminated the contract after making partial payments, and then refused to make any further payments because the owner claimed the contractor’s license was held by a different legal entity.
The trial court granted summary judgment. The appellate court noted the use of a fictitious business name does not create a separate entity, and reversed, stating: “the trier of fact shall determine [if] Montgomery Sansome Ltd. LP is a general partnership and a separate entity from the licensed limited partnership.” Montgomery Sansome LP v. Rezai (Cal. App. First Dist., Div. 2; March 28, 2012) 204 Cal.App.4th 786, [139 Cal. Rptr.3d 181].
Be careful when using entities that may not be licensed because it could result in not getting paid for the work performed.