The decision turned on the Third District Court of Appeal’s interpretation of 489.128, Florida Statutes, which makes contracts entered into by unlicensed contractors unenforceable.
Southpoint Shore Management LLC v. Homexpo Miami Corp arises from a dispute between a property owner and a contractor hired to soundproof and level floors at a property on South Beach. The contractor was unlicensed, but did hire licensed subcontractors to perform the work at the property. The contractor delivered a first shipment of flooring, which was rejected due to defects in the materials. A second shipment was ordered and arrived three months later, and was also rejected. At that point, the contractor refused to remove or replace and of the allegedly defective materials.
The property owner sued the contractor claiming the flooring was defective and the contractor filed a counterclaim for money it claimed was owed to it. Both parties moved for summary judgment, with the property owner arguing that the contract could not raise any contractual defenses or a counterclaim for damages based on the contract because 489.128, Florida Statutes, makes contracts entered into by unlicensed contractors unenforceable in law or equity by the unlicensed contractor. The trial court granted the property owner’s motion and the case proceeded to trial.
Despite the ruling on summary judgment, at trial, at various points, the contractor referred to the contract and raised defenses based on the contract. The property owner moved to have the court limit further assertion of contractual defenses based on the ruling on the motion for summary judgment, but the court denied the motion and modified the previous summary judgment ruling to allow the contractor to present and discuss various favorable contract provisions. After the contractor prevailed at trial, the property owner appealed.
On appeal, Florida’s Third District Court of Appeal, reversed the trial court ruling, stating:
In applying Chapter 489, we have held that unlicensed contractors . . . cannot assert contractual defenses.
. . .
Applying the clear statutory language of section 489.128 and our prior holding in McNully, we conclude that the trial court erred when it permitted [the contractor] to present defenses that it could not legally enforce. Because we reverse on this issue, we need not address the other issues raised.
Again the key takeaway from this case is that contractors need to ensure they are properly licensed to bid, contract for, and perform any work they sell. It is not sufficient to simply hire licensed subcontractors to perform work if you, as the contractor, are not also properly licensed.