Florida’s Fourth District Court of Appeal reinstated a contractor’s construction lien after finding that alleged unlicensed contracting in violation of local ordinances did not trigger the application of 489.128, Florida Statute. The court does a good job of outlining the differences between state and local licensing laws and the penalties and scope of enforcement available at the state and local level.
Palm Beach Resurfacing Inc v. Floyd arises from a disputed between a pool-area resurfacing contractor and a homeowner. After the contractor completed the work, the homeowner refused to pay the contractor. The contractor recorded a lien and filed suit. The homeowner filed a counterclaim for defective work and also asserted as a defense that the contractor was not properly licensed under Palm Beach County’s codes governing contractors.
The homeowner moved for summary judgment, arguing that because the contractor did not have the proper local licensing under Palm Beach County Codes, the contractor should be barred from enforcing its lien under various provisions of Chapter 489, Florida Statutes, and Chapter 713, Florida Statutes. The contractor argued in response that it did hold a certificate of competency, though it was connected to a different company, and that the remedies for unlicensed contracting under Chapter 489, Florida Statutes, were not available to the homeowner because no state license was required for the work. The trial court granted summary judgment, finding the contract to be unenforceable because the contractor was not properly licensed, and ordering the lien and related lis pendens to be dissolved. The contractor appealed.
On appeal the contractor argued that summary judgment was improper because Chapter 489’s unenforceable contract remedy only applies to state licensing violations, not local licensing violations. Florida’s Fourth District Court of Appeal began its analysis by looking at the definitions of contractor and pool/spa contract contained in 489.105, Florida Statutes, but noted that the homeowner did not argue on appeal that the contractor was required to have a state license for the work performed.
The court then turned to 489.128, Florida Statutes, which expressly makes unenforceable contracts entered into by unlicensed contractors. However, the court also noted that 489.128, Florida Statutes, expressly indicates that “if a state license is not required for the scope of work to be performed under the contract, the individual performing that work is not considered unlicensed.” The court further found that 489.128, Florida Statutes, does not contain provisions allowing local entities to enforce it, and 489.117, Florida Statutes, which pertains to local licensing, does not refer to 489.128, Florida Statutes. The court concluded:
Thus, chapter 489 provides separate and exclusive remedies against (1) contractors failing to hold state licenses when required, and (2) contractors that are not “registered or certified” when required. Chapter 489 permits counties to enforce remedies against registration and certification violations but not state license violations. As discussed further below, the trial court appears to have missed this distinction.
The Fourth DCA then turned to the local codes and ordinances at issue on appeal. The homeowner relied on local law section 7-52 that requires contractors to obtain a certificate of competency before performing certain work. However, the court also found that this provision was limited in scope, stating:
The local law provisions provide a single penalty, apart from administrative disciplinary action, for contractors “engag[ing] in the business or act in the capacity of a contractor without having met the provisions of this [article]”: a “first degree misdemeanor” conviction. See Palm Beach County Code, App. G (Local Laws), § 7-60(A), (E) (Nov. 30, 2018). In other words, the local codes and ordinances only provide for administrative discipline and criminal punishment for violations of contractor competency or licensing requirements.
After examining these statutes and local codes, the Fourth DCA reversed the trial court, concluding that the “trial court erred as a matter of law because neither the county code nor chapter 489 permitted the trial court to impose an “unenforceable contract” remedy on the facts of this case.” The court further explained, stating:
Further, the trial court overlooked the plain language of penalty provisions in the local laws relied upon in finding the contract unenforceable. The trial court claimed that Palm Beach County Ordinance 97-56 broadly “grants the authority to enforce Florida Statutes Chapter 489 against those individuals and/or entities that are required to hold a certificate of competency as issued by the county.” The ordinance's actual text is much narrower: it grants a local administrative board the authority to “assess fines as set forth in Fla. Stat. § 489.127 and the Special Act.” Id. (emphasis added). The ordinance does not otherwise incorporate the penalties provided in chapter 489. Id.
The trial court's error apparently stems from the failure to recognize that sections 489.127 and 489.128 are wholly separate statutory schemes. When the two statutes are read together, it is clear the remedies for the asserted contractor competency violations stem from section 489.127, and not section 489.128. The trial court erred in applying section 489.128’s “unenforceable contract” remedy to this case.
The court remanded for further proceedings in the trial court.
There are a few key takeaways for contractors from this case. First, contractors should be aware that in many instances there are both state and local laws that apply to their work and any licensing requirements and should confirm that they are compliant with both before starting a project. Second, contractors should be aware of the differences between their rights under both state and local laws and the potential penalties that can be imposed at both the state and local level.