Appeal from Superior Court of Snohomish County. Docket No: 93-2-00539-1. Date filed: 03/09/95. Judge signing: Hon. James H. Allendoerfer.
Authored by. William W. Baker. Concurring: Faye C. Kennedy, Walter E. Webster.
The opinion of the court was delivered by: Baker
BAKER, C.J. - Jeffrey Evans (Evans) and his wife Mary contracted with Architectural Cabinets, Inc. (ACI) through Rodney Mayo, their friend and the president of ACI, for land clearing and grading. The parties timed performance of their contract so as to avoid statutory permit requirements.
Because we hold that the contract was illegal and the parties were in pari delicto, we reverse the trial court and remand for dismissal of ACI's claim with prejudice. *fn1
The following unchallenged findings are verities. *fn2 ACI is a licensed, registered, and bonded general contractor in Washington. Evans and Mayo have been friends and business associates for over 20 years. None of their agreements have been in writing.
Evans and Mayo entered into an oral agreement for ACI to provide the equipment, materials, and labor to clear, grade, and install drainage on Evans' real property in Snohomish County. Both parties knew that a permit was required for this work, but they agreed to do the work without permits, working quickly and secretly to avoid a county stop-work order. Evans testified that he knew the property had standing water and that a surveying company told him the property contained wetlands. Evans agreed to pay Mayo either with a lot after the land was subdivided or with future commissions from the joint venture.
Evans and Mayo accomplished most of the work before the county posted a stop-work order on the property for failure to obtain a permit. ACI was not paid for the work. A few months later, without being requested to do so, ACI installed a drain on the property in violation of the stop-work order. It then filed a lien for its work on the property.
ACI sued to collect on the contract and to enforce its lien. The trial court determined that the lien was not timely and thus was invalid.
But it also determined that ACI could recover on the contract for the work it completed before the stop-work order was posted.
Evans appeals from the judgment in favor of ACI and Mayo, arguing in part that the trial court erred in not applying the doctrine of in pari delicto. ACI argues that (1) Evans did not correctly assign error in his appeal, (2) Evans waived the illegality argument by not pleading it as an affirmative defense, and (3) the trial court erred in admitting the county stop-work order on the land improvement contract. *fn3
Evans argues that the land improvement contract was illegal at its inception because both parties knew the contract violated county code provisions. We agree. If a contract is illegal or flows from an illegal act, a court will leave the parties as it finds them. *fn4 An agreement to violate a statute or municipal ordinance is void, except when the agreement is not criminal or immoral and the statute or ordinance contains an adequate remedy for its violation. *fn5
Mayo suggested doing the work while the county planning department was closed for a week and unable to stop work for the lack of a permit. Both Evans and Mayo knew that a permit was required for the work, but they decided to do a quick "bootleg" job before the county could post a stop-work order. The parties entered into the contract intending to ...