[RPPTL-constructionlaw] 489.128 Fla. Stat. &failure to have a certificate of authority

Mon Nov 14 15:48:32 PST 2011

     I don't believe an unlicensed Contractor's mere employment of
properly licensed individuals was intended by the Legislature to be
sufficient to satisfy the licensing requirements applicable to business
organizations under ch. 489.   Fla. Stat. s. 489.119 (7) sets forth,
under very limited circumstances, when the Legislature determined that
employment of licensees without formally qualifying a business
organization is sufficient.  Under this statute, a business organization
may avoid qualifying paperwork and rely on employed licensees only when
it meets certain organization net worth requirements and only when the
organization is engaged solely in improving land it or one of its
affiliated company's owns.

     One of the problems with the "employee licensee" as qualifier
approach is that there is by definition no DBPR vetting of the finances
and insurance of the entity.  Yes, the DBPR has previously vetted the
individual licensee's creditworthiness and construction knowledge but
not the business organization (which only occurs when there is a proper
qualifying agent application submitted to the DBPR).  The expansive
reading given to qualification by employment alone basically renders
obsolete and mere surplusage the narrow carve out by the Legislature for
such employee licensees at Fla. Stat. s. 489.119(7).  Furthermore, the
expansive reading increases the risk to the public since there is no
agency review and approval of creditworthiness and insurance relative to
the business organization.    Accordingly, I don't believe it is a
proper interpretation of admittedly ambiguous language elsewhere in 489.

     If it is not too late, it might be worth seeking to clarify Ch. 489
in next Legislative session as it relates to licensed individuals
qualifying a business organization by mere employment at time of
contracting.

Michael R. Gibbons  (Bio
<http://lowndes-law.com/our-people/michael-r-gibbons> )
Shareholder
Lowndes, Drosdick, Doster, Kantor & Reed, P.A.
450 South Orange Avenue, 8th Floor
Orlando, FL 32801
Phone: 407-418-6378
Fax: 407-843-4444
email: michael.gibbons at lowndes-law.com
<mailto:michael.gibbons at lowndes-law.com> 
website: http://www.lowndes-law.com <http://www.lowndes-law.com/> 

________________________________

From: constructionlaw-bounces at lists.flabarrpptl.org
[mailto:constructionlaw-bounces at lists.flabarrpptl.org] On Behalf Of
Justin Zinzow
Sent: Monday, November 14, 2011 4:32 PM
To: RPPTL constructionlaw
Subject: Re: [RPPTL-constructionlaw] 489.128 Fla. Stat. &failure to have
a certificate of authority

Thank you for all the responses.  

For clarification, the organization did not have a certificate of
authority and did not have any paperwork filed showing it had a
qualifying agent.  However, like the contractor in Lake Eola Builders,
the contractor did employ an individual who held the requisite license.

 Justin R. Zinzow | Zinzow Law

AV Rated Board Certified 

Construction Specialist

(727) 787-3121

Website <http://www.zinzowlaw.com/>  | Bio
<http://www.zinzowlaw.com/attorney-profiles/Justin-Zinzow/> 

35111 U.S. Highway 19 N. *  Suite 302 * Palm Harbor, FL 34684 * Fax
(727) 787-3231

NOTICE: This e-mail message and any attachment to this e-mail message
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From: constructionlaw-bounces at lists.flabarrpptl.org
[mailto:constructionlaw-bounces at lists.flabarrpptl.org] On Behalf Of
fred.dudley at hklaw.com
Sent: Monday, November 14, 2011 3:03 PM
To: constructionlaw at lists.flabarrpptl.org
Subject: Re: [RPPTL-constructionlaw] 489.128 Fla. Stat. & failure to
have a certificate of authority

All the recent amendment did was remove the language requiring a
"Certificate of Authority," which was never a document issued by DBPR
anyway. However, the requirement for a qualifying agent is still there
(and is so interpreted under all the state cases).

Frederick Dudley | Holland & Knight
Board Certified Construction Lawyer
315 South Calhoun Street, Suite 600 | Tallahassee FL 32301
Phone 850.425.5668 | Fax 850.224.8832 | Cell 850.294.3471
fred.dudley at hklaw.com <mailto:fred.dudley at hklaw.com>  | www.hklaw.com
<http://www.hklaw.com/>  

________________________________________________
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From: constructionlaw-bounces at lists.flabarrpptl.org
[mailto:constructionlaw-bounces at lists.flabarrpptl.org] On Behalf Of Tina
Caraballo
Sent: Monday, November 14, 2011 2:46 PM
To: RPPTL constructionlaw
Subject: Re: [RPPTL-constructionlaw] 489.128 Fla. Stat. & failure to
have a certificate of authority

I disagree with Fred.  Since the amendment that took effect in 2003,
section 489.128(1)(a) provides that a business organization is
unlicensed if it does not have a primary or secondary qualifying agent.
The Lake Eola case recognized that the legislature had directed the
courts to look at whether an organization has a qualifying agent rather
than whether it has the necessary paperwork to demonstrate this fact.
This is consistent with the Baker County Medical Services case as well
as state court cases.  The Board of Trustees v. Morgan case focused its
attention of whether the building professionals involved were licensed
as did Promontory and Martin Daytona Corp.  In those cases the
organization actually had the properly licensed individuals, just not
the paperwork.  This is consistent with the overall statutory scheme as
the failure to apply for registration or certification as a qualifying
agent of a business organization under section 489.119, Florida
Statutes, does not make the contract unenforceable.  Section 489.105
defines a qualifying agent and that is where the focus properly lies -
in other words does the organization have the person with the required
license and qualifications.

While there are no reported decisions following the 2009 amendment that
reflects the abolition of the certificate of authority, the old cases
are still valid and binding as they also interpreted subsection (a),
which remains in the current version of the statute.  The reasoning and
holdings cannot be rejected simply because the certificate of authority
is no longer required.  I submit to you the decision in each of those
cases would have been different if the organization did not actually
have the required licensed contractor.

Tina L. Caraballo

Attorney-at-Law

Florida Bar Board Certified in Construction Law

Hayes & Caraballo, P.L.
830 Lucerne Terrace
Orlando, Florida 32801
T: 407-649-9974 x215
C: 407-716-4835
F: 407-649-9379
tcaraballo at const-law.com

________________________________

From: constructionlaw-bounces at lists.flabarrpptl.org
[mailto:constructionlaw-bounces at lists.flabarrpptl.org] On Behalf Of
fred.dudley at hklaw.com
Sent: Monday, November 14, 2011 1:50 PM
To: constructionlaw at lists.flabarrpptl.org
Subject: Re: [RPPTL-constructionlaw] 489.128 Fla. Stat. & failure to
have a certificate of authority

The federal cases (like Lake Eola, Baker County, etc) are at odds with
the state cases (in which the contracting entity MUST have an approved
QA). 

Frederick Dudley | Holland & Knight 
Board Certified Construction Lawyer 
315 South Calhoun Street, Suite 600 | Tallahassee FL 32301 

Phone 850.425.5668 | Fax 850.224.8832 | Cell 850.294.3471 

fred.dudley at hklaw.com <mailto:fred.dudley at hklaw.com> | www.hklaw.com
<http://www.hklaw.com/> 
-------------------------- 
Sent from my BlackBerry Wireless Handheld 

From: Justin Zinzow [mailto:JZinzow at zinzowlaw.com] 
Sent: Monday, November 14, 2011 01:01 PM
To: RPPTL constructionlaw <constructionlaw at lists.flabarrpptl.org> 
Subject: [RPPTL-constructionlaw] 489.128 Fla. Stat. & failure to have a
certificate of authority 

Committee members:  Please pardon the interruption.  I have the
following question:  If a contractor business organization did not have
a certificate of authority at the time of contract, does the 489.128
penalty apply?

I am aware of the 2006 Lake Eola Builders decision saying the penalty
does not apply, but one of the primary bases of that holding was
eliminated from the statute in 2009 (deletion of the savings clause
indicating that failure to hold a certificate of authority did not deem
the contractor unlicensed if a licensed individual applied for such a
certificate).

Does anyone have any knowledge as to why the legislature made this
amendment in 2009?

 Justin R. Zinzow | Zinzow Law

AV Rated Board Certified 

Construction Specialist

(727) 787-3121

Website <http://www.zinzowlaw.com/>  | Bio
<http://www.zinzowlaw.com/attorney-profiles/Justin-Zinzow/> 

35111 U.S. Highway 19 N. *  Suite 302 * Palm Harbor, FL 34684 * Fax
(727) 787-3231

NOTICE: This e-mail message and any attachment to this e-mail message
contains confidential information that may be legally privileged. If you
are not the intended recipient, you must not review, retransmit, convert
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penalties, and are not intended to be used or referred to in any
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________________________________

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