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Florida First District Court of Appeal Rules on what Qualifies as an Unlicensed Contractor

https://www.floridabusinesslawyersblog.com/files/2015/06/Screen-Shot-2015-06-15-at-12.06.55-PM.pngUnder Florida law, a plaintiff who sues to recover for negligence in the construction of property can receive additional damages, including attorneys’ fees and treble damages, when the person who constructs the home is unlicensed. § 768.0425(2) Florida Statutes. Given that the scope of recovery is greater, arguments concerning what entities qualify as licensed contractors are quite common. Indeed, in a recent decision, Taylor Morrison Services, Inc. v. Ecos, Florida’s First District Court of Appeal examined the scope of what qualifies as an unlicensed contractor for purposes of treble damages and attorneys’ fees under § 768.0425(2).

At issue in Ecos was a 2004 contract for the construction and purchase of a home into which the plaintiffs in this case entered with Taylor Morrison Services, Inc. Following construction of the home, the plaintiffs noticed defects and brought suit against Taylor. Prior to a bench trial, the parties stipulated to there being defects amounting to compensatory damages of $200,000. At the bench trial, the determination was thus limited to whether Taylor was an unlicensed contractor, and, accordingly, whether the plaintiff was entitled to treble damages and attorneys’ fees. Following the bench trial, the trial court held that Taylor was unlicensed, and thus the plaintiff was entitled to treble damages and attorneys’ fees. Taylor then brought the current appeal.

An unlicensed contractor is defined in Florida Statutes § 489.128(1)(a), which provides, “[a] business organization is unlicensed if the business organization does not have a primary or secondary qualifying agent in accordance with this part concerning the scope of the work to be performed under the contract.” However, “a contractor shall be considered unlicensed only if the contractor was unlicensed on the effective date of the original contract or the work.” Id. at § 489.128(1)(c). On the effective date of the contract at issue, pertinent licensing records showed that Taylor had four qualifying agents on record. One had recently left her position with Taylor, but another remained employed with the company. The record showed that, about two and a half months following the execution of the contract, a building application for a building permit showed the signature of the qualifying agent who had left employment with Taylor. Indeed, the agent testified that she had no involvement with the project and that, although she had signed blank building permits while employed with Taylor, she did not authorize pulling a permit for this project or supervise the project. The trial court focused on the evidence of the agent’s lack of authorization or supervision on the project in concluding that Taylor was unlicensed under § 489.128(1).

However, the First District disagreed with the trial court’s determination and reversed the ruling. The First District found the trial court’s ruling to be inconsistent with the statutory language of § 489.128(1). The First District noted that at the effective date of a contract, a qualifying agent was employed with Taylor. The First District determined that the trial court erred in considering evidence regarding possible fraud, including whether a particular agent whose name was associated with the project had, in fact, supervised or monitored the construction. Instead, the First District read the statute to limit the inquiry to whether a qualifying agent was employed with the business at the time of contracting, not considering circumstances that arose afterward. If such a qualifying agent was at the business’ disposal at the time of contracting, the business was licensed for purposes of § 489.128(1). Accordingly, the Court reversed the trial court’s ruling.

Although this reading of § 489.128(1) may comport with the text, it should be noted that this reading would allow a contractor to be considered licensed even if there were no qualifying agent employed with the business during the time the home is actually constructed and even if none supervised the actual construction. Limiting the inquiry to a particular time may allow for more consistent and easily ascertainable results, but a licensure provision would seem to lose some of its purpose if a business could, in theory, not actually have the professional resources contemplated.

Although the plaintiffs in Ecos will still get recovery for the negligent construction of the home, the recovery of attorneys’ fees and treble damages is still a loss. Indeed, provisions for treble damages and attorneys’ fees are not uncommon, and someone who has been injured should always know if his or her possible claim provides for recovery of these additional damages. The assistance of experienced counsel can go a long way in assuring that one knows the true value of a claim, and the Florida construction litigation attorneys at Stok Folk + Kon are attentive to maximizing their clients’ recoveries. If you’ve recently been injured in a possible case of negligence and have questions regarding your possible claim, feel free to contact us for a case evaluation.

More blog posts:

Seller Allowed to Keep Buyer’s Deposit For Failing to Close on Time, Florida Business Lawyers Blog, March 11, 2015

Commercial Property Broker Entitled to Enforce Lien to Collect Commission on Sale, Florida Business Lawyers Blog, Feb. 3, 2015