Austin Building Co. v. Rago, Ltd.
63 So. 3d 31
Fla. Dist. Ct. App.2011Background
- ACLP and Merrick Trust entered a Prime Contract for a mixed-use project in Coral Gables, Florida; ACLP would assign the Prime Contract to its affiliate, ABC, once ABC obtained state licensure.
- Rago, unlicensed at project start, was engaged by ACLP to construct structural concrete; ACLP learned of Rago's unlicensed status about two weeks after work began.
- After April 2005, ABC obtained licensing and formally contracted with Rago via a Subcontract dated July 2005 but reflecting an April 1, 2005 execution date.
- ABC terminated Rago for delays/defects; in 2007, Rago sued ABC and Federal (Rago’s surety) for amounts under the Subcontract; ABC countersued for defective work and asserted licensure defenses.
- Both sides moved for summary judgment on licensure, and the trial court granted summary judgments in favor of Federal and against Rago/ABC; the Third District reversed as to ABC.
- The court held that material facts about who was the actual contractor and the parties’ knowledge of licensure were disputed, precluding summary judgment. The case was reversed and remanded on cross-appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rago can enforce the Subcontract given licensure status | ABC/ACLP contended Rago was unlicensed, thus couldn't enforce the Subcontract. | Rago argued licensure issues did not render the contract unenforceable where evidence suggested ACLP or ABC could be the contractor. | Reversed summary judgment; genuine issues of material fact remain. |
| Whether ABC was the effective contractor when work commenced | Subcontract documents and Prime Contract show ABC as contractor; however, Prime Contract specified ACLP as contractor. | Letters and contract structure create a factual dispute about who acted as contractor as of April 1, 2005. | Reversed; factual issues preclude summary judgment on contractor identity. |
| Whether the 2009 amendments to 489.128 apply retroactively to the contract | Rago should be treated as unlicensed under amended 489.128(1)(a); retroactive application governs. | Statutory amendments should not change the contract outcome retroactively; prior law applied. | Applied retroactively; 2009 amendments govern licensure status for this contract. |
| Whether a business organization can be unlicensed under 489.128(1)(a) when the qualifying agent status is the issue | Rago as a business organization could be unlicensed under amended statute despite facts about individuals. | The 2009 amendments treat the business organization as unlicensed if no qualifying agent is designated; supporting case law. | Reversed; business organization licensure status requires analysis under 489.128(1)(a) as amended. |
Key Cases Cited
- Volusia Cnty. v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126 (Fla.2000) (summary judgment de novo review; factual disputes preclude)
- Rakusin Law Firm v. Estate of Dennis, 27 So. 3d 166 (Fla. 3d DCA 2010) (de novo review; disputed material facts preclude summary judgment)
- Copeland v. Fla. New Invs. Corp., 905 So. 2d 979 (Fla. 3d DCA 2005) (in pari delicto considerations and summary judgment standard)
- A-1 Quality Corp. v. Oak Park Terrace, Inc., 32 So. 3d 166 (Fla. 4th DCA 2010) (business organization licensure; licensure of qualifying agent)
- MMII, Inc. v. Silvester, 42 So. 3d 876 (Fla. 4th DCA 2010) (contracts and licensure under 489.532/489.128 analyses for business orgs)
- MGM Constr. Servs. Corp. v. Travelers Cas. & Surety Co. of Am., 57 So. 3d 884 (Fla. 3d DCA 2011) (retroactivity of amendments to licensure statutes)
- Castro v. Sangles, 637 So. 2d 989 (Fla. 3d DCA 1994) (in pari delicto doctrine considerations)