Court Determines Contractor’s Company is Unlicensed Despite Owner being Licensed
Cam Bradford Homes, LLC v. Arrants arises from a dispute over a contract to build a new single family home. In December 2020, the homeowner entered into a contract with Cam Bradford Homes, LLC to build a new home on their property. The LLC’s owner, and a certified general contractor, obtained a building permit and supervised the project. During construction, disputes arose between the parties and the property owners terminated the contract. The LLC filed a lawsuit, alleging claims for breach of contract, lien foreclosure, unjust enrichment, and tortious interference. The property owners answered and filed various counterclaims.
The property owners ultimately moved for summary judgment, arguing that the LLC was unlicensed because it did not have a qualifying agent under Chapter 489, Florida Statutes. The LLC argued in response that it was properly licensed because its owner, who held a certified general contractor’s license, performed as the LLC’s qualifying agent even though he had not applied for registration or certification of the business as required by 489.119, Florida Statutes. The LLC also argued that it could, at a minimum, recover for work that did not require a license to perform. After a hearing, the trial court granted the property owner’s motion, finding that the LLC never had a qualifying agent, making it unlicensed at all relevant times for the lawsuit. The LLC appealed.
On appeal Florida’s Fifth District Court of Appeal started its analysis with a thorough explanation of the licensing requirements for contracting businesses as follows:
In Florida, all contractors must be certified or registered with the Department. When any business organization other than a sole proprietorship intends to engage in construction contracting, the applicant must apply for registration or certification as the qualifying agent of the business organization. To qualify a business organization contractor for the first time, the agent must apply to the Construction Industry Licensing Board (“Board”) and submit certain documents and a fee. If the Board determines the business is qualified, the Department will issue the business organization a certificate or registration.
Under Florida law, only a licensed contractor can enforce its contracts. To be considered licensed, a business organization contractor must have a qualifying agent that is itself licensed to perform the work contemplated in the contract. Thus, whether a business organization is a licensed contractor within the meaning of section 489.128 turns on whether the business organization is [legally] associated with a person licensed for the type of work to be performed under the contract as of the effective date of the contract.
The Court then turned to the LLC’s argument, which was in essence that a business organization only needed to have a licensed individual perform the obligations of a qualifying agent to raise a material fact (and therefore avoid summary judgment) as to whether the organization had a qualifying agent.
The Court rejected this argument, noting that nothing in Chapter 489, Florida Statutes, contemplated an individual “acting” as a qualifying agent, and that adopting such an argument would render meaningless the statutory provisions that prohibit businesses from operating without being certified or registered and the statutory provisions that prohibit licensed contractors from allow unqualified businesses to use their licenses.
The Court concluded, holding that because the LLC’s owner never properly qualified the LLC, it was an unlicensed contractor, and therefore could not enforce its contract, making summary judgment appropriate.
There are a couple of takeaways from this case for contractors. First, contractors need to ensure their documentation and qualification of their company is fully compliant with Chapter 489, Florida Statutes. Second, the case makes it clear that individuals who have licenses should not let companies use their license without filing proper paperwork with the DBPR, and companies should not use licenses that are not properly connected to them.
Contractors should also note that the risk of not ensuring that they are properly licensed is that their contracts could be determined to be unenforceable. That’s what happened in this case, and while the appeal does not describe the dollar amounts at issue, no one wants to have a contract rendered unenforceable by a technical licensing compliance issue.
Jason Lambert is a Florida Board Certified Construction Attorney and Partner in the Construction Industry Practice Group at Hill Ward Henderson, in Tampa, Florida. He is also the founder and chief contributor to the Hammer & Gavel construction law blog. Jason focuses his practice on representing contractors, subcontractors, and materials suppliers throughout the state of Florida. Before law school, Jason spent a decade working in the construction industry, primarily as a project manager and operations director for both new construction and remodeling. He can be reached at jason.lambert@hwhlaw.com or 813-227-8495.
