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

Tue Nov 15 07:33:46 PST 2011

Robert:

This makes all the sense in the world.  Why have the statute if it doesn’t really mean much?  As far as the "fairness" argument there is the "in para delicto" doctrine where the owner knows the contractor is unlicensed.  In that case I believe the courts tend to leave that parties "as is."  If the owner has paid and knew the contractor was not licensed then the owner doesn’t get his money back.  If the owner hasn’t paid then the unlicensed contractor doesn't get paid. Whether the contractor is licensed  was totally within the control of the contractor so why should he be heard to complain?

  Raymond L. Robinson, Esq.
  Cell: (305) 632-4384
  http://www.rrobinsonlaw.com/  

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Connect with Robinson & Associates, P.A.

-----Original Message-----
From: constructionlaw-bounces at lists.flabarrpptl.org [mailto:constructionlaw-bounces at lists.flabarrpptl.org] On Behalf Of Robert E. Doan
Sent: Tuesday, November 15, 2011 9:20 AM
To: RPPTL constructionlaw
Subject: Re: [RPPTL-constructionlaw]489.128 Fla. Stat. &failure to have a certificate of authority

I have been involved in a lot of litigation involving 489.128 with varying fact patterns (unlicensed subsidiaries, family members pulling permits, the developer exception, an individual license holder doing business under an unqualified llc, etc.)  over the last 9 years and after reading every relevant case, statute (and perhaps most importantly) relevant sections of the administrative code 100 times and deposing multiple people at the CILB, I have come to the following conclusions:

1.) The recent deletion of the certificate of authority language did not change anything.  The requirement is the same now as it was before, i.e., a business organization must have a qualifying agent.  

2.) The language of 489.128 is very simple, a business organization is unlicensed if it does not have a qualifying agent.

3.) The administrative code and DBPR lay out specific ways in which a license holder may qualify a company.

4.) The DBPR can tell you whether or not an individual qualifies or qualified a particular organization on a particular date.

The problem with buying or selling the "we just didn't file the paperwork" argument (and many lawyers and judges have bought or sold that argument) is that it stands the entire scheme on its head and makes it meaningless.  Applying that argument, a contractor can hold a license as an individual and create a single purpose entity for every project, pull the permit, "oversee" the project, and be immune from the 489.128 repercussions despite the fact that each single purpose entity is clearly unlicensed per the administrative code and 489.128 (if a contractor wishes to engage in contracts both as an individual and corporate name or under multiple entities he must apply and appear before CILB for permission to do so.)  If you do not have to "do the paperwork" but merely need to act like the qualifying agent described in 489.128, than I suggest every one of us start recommending this strategy to our clients to protect their other business assets from the risk/failure of any particular project.

Also, similar logic to other scenarios:

"Well judge, I don't have a drivers license, but I have ridden in and/or driven cars for 20 years"

"Well judge, I am not actually licensed to practice law in Florida because I stopped paying my dues 5 years ago, but I graduated in the top of my class and worked at several large law firms for 20 years, I just didn't do the paperwork."

"No judge, I am not a licensed physician in Florida, but I performed plastic surgery in Mexico for 25 years and meet all the criteria to be licensed in Florida, I just wasn't sure what form to fill out."  Etc. Etc. Etc.

More specifically in our industry, "Judge, ABC Contracting is owned and operated by Jim Smith, Jr., and no it does not have a qualifying agent technically, but Jim's father, Jim Sr. has been licensed for 25 years and he get's paid $100 for every permit he pulls for the company and you better believe he would be out there if there was ever a problem."  Many of you may not see a problem with this scenario and believe a contract should be enforceable in this scenario.  I suggest however, to do so makes the industry more susceptible to unfair and deceptive trade practices and encourages license holders to rent out their license to pull permits for unqualified entities.  It also leads to increased competition for our clients that actually do business the right way and according to the laws and administrative code. 

The bottom line is, there are specific procedures for a license holder to qualify a company.  It is not the mystery that many lawyers make it out to be.  For those that give opinions on it without reading the relevant portion of the administrative code, I highly recommend reading it (61G4-15.0021. Business Organizations.)  There are also some good materials on the DBPR website (http://www.myfloridalicense.com/dbpr/pro/cilb/documents/cilb_faq_qb_elimination.pdf)

I have taken some preliminary steps to work on new legislative amendments to remove any lingering confusion about whether an entity is qualified or not for the purposes of 489.128 and will submit same to the rest of the legislative subcommittee hopefully by the end of the year along with an article on the topic.

Sorry for rambling in a quick email, but you are correct:  This is a "hot topic" in that there are many very good construction attorneys in the State of Florida with very different opinions on how 489.128 should or should not be applied.  I have argued both sides with success and failure.  Unless you know your particular judge and if/how he/she has ruled on the same issue in the past, I would recommend advising your client that the issue could easily go either way.  There is case law out there that is on the wrong track in my opinion, especially some of the federal cases.  In my opinion, it should be as simple as evaluating whether or not someone has a driver's license.  You do or you don't.  If you don't, and it is not due to an error by a gov't agency, you will face certain consequences. 

Robert E. Doan
Board Certified Construction Attorney
Supreme Court Certified Circuit Civil Mediator
Silverman, Vorhis & Doan
311 NE 1st Street
Gainesville, FL 32601
PH: 352-337-8373
Fax: 352-505-6188
Email: robert at lawgainesville.com   

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-----Original Message-----
From: constructionlaw-bounces at lists.flabarrpptl.org [mailto:constructionlaw-bounces at lists.flabarrpptl.org] On Behalf Of fred.dudley at hklaw.com
Sent: Tuesday, November 15, 2011 8:15 AM
To: TCaraballo at const-law.com; constructionlaw at lists.flabarrpptl.org
Subject: Re: [RPPTL-constructionlaw] 489.128 Fla. Stat. &failure to have a certificate of authority

Do you think the practice of law should also be regulated as you have described?

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

----- Original Message -----
From: Tina Caraballo [mailto:TCaraballo at const-law.com]
Sent: Tuesday, November 15, 2011 07:46 AM
To: RPPTL constructionlaw <constructionlaw at lists.flabarrpptl.org>
Subject: Re: [RPPTL-constructionlaw] 489.128 Fla.       Stat.   &failure        to      have    a       certificate of authority

Obviously this is not the preferred method and all contractors should complete the required paperwork.  While the contractor may be subject to discipline, it should not lose the ability to enforce its contract.  This is a core question of the role and purpose of the CILB.  Do we want to bring contractors under the regulation umbrella or do we want to just say you made a mistake on your paperwork so you lose that $500000 contract claim and we don't care that you went out of business?    Under the prior cases it was held to be a factual determination of whether the qualifier actually met the definition.  In most instances the business organization was properly qualified, but after the date of the contract.  Isn't it more appropriate for that contractor to be disciplined by the Board and continue to operate?
Sent via BlackBerry by AT&T

-----Original Message-----
From: "Gibbons, Michael" <Michael.Gibbons at lowndes-law.com>
Sender: <constructionlaw-bounces at lists.flabarrpptl.org>
Date: Mon, 14 Nov 2011 18:48:32
To: RPPTL constructionlaw<constructionlaw at lists.flabarrpptl.org>
Reply-To: RPPTL constructionlaw <constructionlaw at lists.flabarrpptl.org>
Subject: Re: [RPPTL-constructionlaw] 489.128 Fla. Stat.
        &failure        to      have    a       certificate of authority

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