By: Douglas J. Roberts, Esq.
Where a contractor or subcontractor is unlicensed and enters into a contract, the contract is void and unenforceable by the unlicensed contractor. In Earth Trades, Inc. v. T&G Corporation, 2010 WL 3359412 (Fla. 5th DCA 2010), Earth Trades, a subcontractor, entered into a subcontract with T & G Corporation (T & G), a general contractor, to perform site work for a parking garage. T & G claimed that Earth Trades performed its work in a defective manner and terminated the subcontract with Earth Trades.
T & G subsequently sued Earth Trades for breach of contract. It was undisputed that Earth Trades was not licensed to perform the work required under the subcontract. However, it was disputed whether T & G was aware of Earth Trades’ lack of license. During the case, the trial court granted a partial summary judgment in favor of T&G, which precluded Earth Trades from arguing as a defense to T&G’s claim, that the subcontract was unenforceable because of T&G’s alleged knowledge of Earth Trades’ lack of license. The trial court entered a judgment in favor of T&G, and Earth Trades appealed on the grounds that the trial court erred in precluding Earth Trades from arguing that the contract was unenforceable because of T&G’s alleged knowledge of Earth Trades’ lack of license.
The appellate court upheld the judgment in favor of T&G. The appellate court noted that prior to Florida Statutes, Section 489.128 being revised in 2003, some courts had interpreted the former statute as something of a two way street, preventing a party from enforcing a contract against an unlicensed contractor (or its surety) where that party had knowledge of the contractor’s lack of license.
However, effective June 25, 2003, the statute was amended to provide that a contract with an unlicensed contractor was unenforceable in law or in equity by the unlicensed contractor. The statute further provided in pertinent part: “This section shall not affect the rights of parties other than the unlicensed contractor to enforce contract, lien, or bond remedies. . .”
The appellate court explained that the trial court’s decision was consistent with the clear and unambiguous language of Florida Statutes, Section 489.128 – that not only may an unlicensed contractor not sue to enforce a contract, but an unlicensed contractor may not defend a lawsuit on the grounds that the other contracting party knew it lacked a licensed to perform the work.
This case serves to remind contractors and subcontractors that Florida Law strongly disfavors contractors from performing construction improvements without the required license. As demonstrated by this case, the failure to maintain the proper license where one is required will likely have adverse consequences to the party performing the work.
About the Author: Douglas J. Roberts has been Board Certified in Construction Law since 2005, the first year the Florida Bar offered its members the opportunity to achieve such a designation. He served as a judicial intern to the Honorable Arthur Birken, Broward County Circuit Court Judge, a certified legal intern with the Broward County State Attorney’s Office, and has practiced in the area of Construction Law for over 15 years, during which he has represented the FDIC, Hewlett-Packard, a Panel Bankruptcy Trustee in the Southern District of Florida, as well as general contractors, subcontractors, suppliers, sureties and owners in South Florida. Mr. Roberts has been recognized by his peers as a “Florida Super Lawyer” and focuses his practice exclusively on construction law related representation. For more information, please contact him at [email protected]