ACTIONS AGAINST UNLICENSED CONTRACTORS

The rules differ somewhat in the First and Second Department. This was discussed recently in MATTER OF MacNAMARA v. Edwards, 2016 NY Slip Op 32199 - NY: Supreme Court 2016:

"The established law of the Second Department is clear that a home improvement contractor who is unlicensed at the time of the performance of the work for which he or she seeks compensation forfeits the right to recover damages based on either breach of contract or quantum meruit (Flax v. Hommel, 40 AD3d 809, 810, 835 NYS2d 735, 736 [2d Dept. 2007]; accord Emergency Restoration Servs. Corp. v. Corrado, 109 AD3d 576, 577, 970 NYS2d 806, 807 [2d Dept. 2013][applying Suffolk County Code regulating unlicensed home improvement]; Racwell Const., LLC v. Manfredi, 61 AD3d 731, 732-33, 878 NYS2d 369, 371 [2d Dept. 2009][Westchester County]). Pursuant to CPLR 3015(e), a complaint that seeks to recover damages for breach of a home improvement contract or to recover in quantum meruit for home improvement services is subject to dismissal . . . if it does not allege compliance with the licensing requirement" (CMC Quality Concrete III, LLC v. Indriolo, 95 AD3d 924, 925-26, 944 NYS2d 253, 254-55 [2d Dept. 2012]).

Generally speaking the law of this department recognizes that a homeowner may seek restitution for payments actually made for work which was not performed or for defective work (Brite-N-Up, Inc. v. Reno, 7 AD3d 656, 657, 776 NYS2d 839, 840 [2d Dept. 2004]; Goldstein v. Gerbano, 158 A.D.2d 671, 552 N.Y.S.2d 44, 45 [2d Dept. 1990] [plaintiffs were entitled to rescind the contracts and to recover the amounts designated in the judgment as a result of the defendant's failure to perform]; Segrete v. Zimmerman, 67 AD2d 999, 1000, 413 NYS2d 732, 733 [2d Dept. 1979]; compare with Sutton v. Ohrbach, 198 AD2d 144, 144, 603 NYS2d 857, 857 [1st Dept. 1993][plaintiff may not use the statute as a sword to recoup monies already paid in exchange for the purportedly unlicensed services])."