The First District Court of Appeal recently issued a decision on a construction licensing issue that has industry-wide implications.* See Taylor Morrison Servs., Inc. v. Ecos, 163 So. 3d 1286 (Fla. 1st DCA 2015). The case involved alleged construction defects in a single-family home in Jacksonville. Although the home did have some defects, the homeowners opted to bring not only a construction defect claim but also a claim for negligence by an unlicensed contractor under section 768.0425, Florida Statutes. A business organization is considered unlicensed if it “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.” § 489.128(1)(a), Fla. Stat. Further, a “contractor shall be considered unlicensed only if the contractor was unlicensed on the effective date of the original contract for the work.” § 489.128(1)(c), Fla. Stat. (emphasis added).
Although the builder in Ecos employed several qualifying agents on the contract date, the homeowners argued, and the trial court agreed, that having a qualifying agent “in accordance with this part” meant that all of the other provisions of chapter 489 should be evaluated in determining a contractor’s licensure, including the level of the contractor’s supervision during construction and the manner in which the building permit was obtained. Accordingly, the trial court ruled that the builder was unlicensed because: 1) the qualifier who signed the building permit was no longer employed by the builder and did not authorize the use of her license; and 2) there was a lack of qualifier supervision on the project. See Ecos, 163 So. 3d at 1288-89.
The First DCA reversed because, in its view, section 489.128(1)(c) “precludes considering events that occur after [the contract date], by instructing that a contractor be considered unlicensed ‘only if’ the contractor is unlicensed at that specific time.” Ecos, 163 So. 3d at 1289. Because it “cannot be known on the contract’s effective date whether the business organization will actually ensure compliance with the permitting and supervision requirements of chapter 489,” considering such activities would require the court “to read the date requirement out of the statute.” Id. at 1290. In reaching that conclusion, the court recognized the pitfalls associated with tying licensure to ongoing activities during the course of construction (such as permitting or supervision) — namely, “a business organization’s licensure status ... can change throughout the course of construction for a particular project.” Id. Ultimately, the First DCA concluded that, while contractors may be penalized under other sections of chapter 489 for how they engage in construction activities, those activities are “irrelevant to the narrow issue of whether [a contractor] is licensed” on the contract date. Id. at 1292.
As a result of the decision in Ecos, Florida contractors that are qualified on the date of a construction contract are licensed for the project.
*Note: The author is an attorney at Sivyer, Barlow & Watson, P.A., which represented the builder in Ecos.
