June 2015 Article

June 2, 2015 by on

Taylor Morrison Services, Inc., f/k/a Morrison Hones, Inc. v. Carol Ecos and Susan Bessing, 40 Fla. L. Weekly D1283b (1st DCA, May 28, 2015)

The First DCA reverses trial court’s ruling on whether a national home builder was acting as an unlicensed contractor, pursuant to Florida Statute § 489.128(1).

Taylor Morrison Services, Inc., f/k/a Morrison Homes, Inc., (“Taylor Morrison), appeals a final judgment ruling that it was acting as an unlicensed contractor during the construction of a home for Carol Ecos and Susan Bessing (the “Homeowners”). In the underlying action, the Homeowners asserted claims of negligence by an unlicensed contractor as well as other claims concerning construction defects against Taylor Morrison.

Prior to the trial court hearing the case, Taylor Morrison and the Homeowners stipulated to claims asserting construction defects and that the construction defects in the home caused compensatory damages in the amount of $200,000. Therefore, the case proceeded to the trial court only on the issue of whether Taylor Morrison was acting as an unlicensed contractor under §489.128(1) in which the Homeowners were seeking treble damages and attorneys’ fees.

Specifically, the Homeowners claimed that Taylor Morrison pulled permits under a former qualifying agent’s license number without her permission and the former qualifying agent did not supervise the construction of the Homeowner’s home. Therefore, Taylor Morrison acted as an unlicensed contractor during the construction of the Homeowners’ home.

Section 489.128(1)(a), as it relates to business organizations states, in relevant part, “a business organization is unlicensed if the business organization does not have a primary or secondary qualifying agent in accordance with this part concerning the scope of the work to be performed under the contract.” Further, § 489.128(1)(c), states, in relevant part, “a contractor shall be considered unlicensed only if the contractor was unlicensed on the effective date of the original contract for the work, if stated therein, or, if not stated, the date the last party to the contract executed it, if stated therein.”

After reviewing this case de novo, the First DCA reversed and remanded the trial court’s final judgment. Specifically, the First DCA held that § 489.128(1) turns on whether the business organization had qualifying agents to perform the scope of the work under the contract at the time the contract was entered. The trial court erred by considering events that occurred after the contract was entered into by Taylor Morrison and the Homeowners.

Furthermore, the First DCA found that § 489.128(1)(a)’s inclusion of the modifier requiring the business organization have a qualifying agent “concerning the scope of the work to be performed under the contract” meant “the business organization must have at its disposal a person who is recognized as a qualifying agent and licensed as an individual to perform the type of work addressed in the contract.” There is no requirement that the business organization’s qualifying agent be the same person that pulls the permit and supervises the construction under the contract.

It is undisputed that Taylor Morrison and the Homeowners entered into the contract for the construction and purchase of a home on February 13, 2004. According to the records of the Department of Business and Professional Regulation Construction Industry Licensing Board, Taylor Morrison had four qualifying agents as of that date. While one of the qualifying agents included the former employee referenced in the fraudulent building permit allegations, Taylor Morrison had other qualified agents, including Douglas Guy, who was a duly licensed certified building contractor that was employed as a primary qualifying agent for Taylor Morrison on February 13, 2004 and continued this employment throughout the construction of the Homeowners’ home. The First DCA held Taylor Morrison had a qualified agent pursuant to § 489.128(1) because it had a qualified agent employed on the date the contract with the Homeowners became effective. Based on the statutory construction of § 489.128(1), there is no requirement that Mr. Guy be the individual that pulls the permit or supervises the construction of the Homeowners’ home.

In the concluding comments of the First DCA’s opinion, it stated “when ‘qualifying agent’ is considered in terms of a person’s individual licensure to perform regulated construction work and his official affiliation with a business organization,” the issue must be narrowly tailored to consider the licensure status as of the effective date of the contract. The issues concerning whether Taylor Morrison may have violated the law by using a former employee’s building license to pull a permit without that employee’s permission or by performing the project with inadequate supervision are irrelevant when determining whether Taylor Morrison was an unlicensed contractor pursuant to § 489.128(1), as these issues occurred after the effective date of Taylor Morrison’s contract with the Homeowners. Therefore, the First DCA held Taylor Morrison was a licensed contractor under § 489.128(1) as of the date of the contract with the Homeowners and is not liable to the Homeowners for treble damages or attorneys’ fees.