Woods Bros. Homes, Inc. v. Walker Adjustment Bureau

601 P.2d 1369 (1979)

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Nature of the Case

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Facts

Fred, a resident of California, contracted with D, a Delaware corporation having its principal place of business in Colorado, to perform rough carpentry work on a D's apartment complex in Albuquerque, New Mexico. Contract negotiations took place in California, Colorado, and New Mexico. Fred commenced work on the project before August 22, 1972, the date the contract was signed in Colorado. New Mexico officials ordered construction halted because Fred had not obtained a New Mexico contractor's license. D canceled Fred's contract and refused to pay him. D did pay approximately $27,000 to employees of Fred for the work they had completed. Walker, as Fred's assignee, brought suit in Colorado seeking recovery against D on either a contract or quantum meruit theory. Application of Colorado law would result in D being liable as there is no impediment to enforceability of the contract. New Mexico law would not allow any type of recovery. Under New Mexico law a failure to obtain a license could result in a criminal sanction and no recovery on the contract or unjust enrichment regardless of legal theory on the contract. The trial court applied New Mexico law and dismissed the case. P appealed and the court reversed holding that under the Restatement (Second) of Conflict of Laws (Second Restatement), Colorado would have the most significant relationship to the contract because of its interest that agreements be validated and that the parties’ expectations be protected. It held that D was estopped because it told Fred that he could work in New Mexico despite Fred’s knowledge of his lack of a license. The court reversed and D appealed.