Burr Alert: Ground Control, LLC v. Capsco Industries, Inc., et. al.: Opening The Door To Claims By Unlicensed Contractors In Mississippi

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The Mississippi Supreme Court, in a case of first impression, recently addressed claims for nonpayment by contractors performing work in the state in violation of Miss. Code Ann. Section 31-3-15, which requires contractors performing work to be licensed with the Mississippi State Board of Contractors. Specifically, in Ground Control, LLC v. Capsco Industries, Inc., et.al., No. 2011-IA-00928- SCT, --- So.3d ---, 2013 WL 2436665 (Miss. June 6, 2013), the Supreme Court held that an unlicensed 2nd tier subcontractor may bring claims against a 1st tier subcontractor with which it contracted for unjust enrichment and quantum meruit, for its actual costs, at least where both parties to the contract were unlicensed, and both were aware of the sub-subcontractor’s failure to comply with licensing under Section 31-3-15.

In Ground Control, a plaintiff sub-subcontractor, Ground Control, LLC (“Ground Control”), an unlicensed, out-of-state construction firm, was hired by subcontractor Capsco Industries (“Capsco”), another unlicensed, out-of-state contractor, to perform work on a project located in Biloxi, Mississippi, owned by Harrah’s Casino. Neither Harrah’s nor the general contractor, W.G. Yates and Sons (“Yates”), were parties to the Ground Control-Capsco contract. Both Ground Control and Capsco were aware, when signing the contract in December 2007, that Ground Control was not licensed to do construction contracting in Mississippi, in violation of Section 31-3-15. Ground Control performed work on the project for almost a year, installing water, sewage, and storm-drain lines, until it was terminated by Yates in October.

Please see full Alert below for more information.

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