Kvaerner Const., Inc. v. AMERICAN SAFETY CASUALTY INS. CO., 5D02-1765.
| Decision Date | 17 April 2003 |
| Docket Number | No. 5D02-1765.,5D02-1765. |
| Citation | 847 So.2d 534 |
| Parties | KVAERNER CONSTRUCTION, INC., Appellant, v. AMERICAN SAFETY CASUALTY INSURANCE COMPANY, Appellee. |
| Court | Florida District Court of Appeals |
A. Anderson B. Dogali and Jane M. Wiederof Forizs & Dogali, P.L., Tampa, for Appellant.
DeWitte Thompson of Thompson & Slagle, P.C., Norcross, GA, for Appellee.
Kvaerner Construction, Inc. appeals a final summary judgment dismissing its claims against American Safety Casualty Insurance Company, the surety for Kvaerner's subcontractor Steel Tec Construction, Inc. On appeal, Kvaerner argues there are material fact issues which preclude entry of summary judgment.1 We disagree and affirm.
In July 1998, Kvaerner was hired as the general contractor to build an assisted living facility in Hernando County. A few months later, Kvaerner entered into a $1,173,000 subcontract with Steel Tec for the structural framing and miscellaneous decking and sheathing for the project. The subcontract required Steel Tec to obtain and pay for all necessary permits and licenses for the project and to comply with all federal, state, municipal and local laws and regulations.
The subcontract also required Steel Tec to furnish Kvaerner with a performance and a labor and material bond, which it did through American. The performance bond provides that if Steel Tec performs its subcontract, the bond obligation becomes null and void.2 Steel Tec started working on the project in late 1998. In February 1999, Hernando County stopped work on the project because Steel Tec was unlicensed.
Kvaerner declared Steel Tec in default for failure to have a license and other breaches of the subcontract. Kvaerner then demanded American remedy the default under the performance bond. When American declined to do so, Kvaerner filed this lawsuit against American for breach of its bond obligations.
American moved for summary judgment pursuant to section 489.128, which renders contracts by unlicensed contractors unenforceable. American argued Kvaerner hired Steel Tec knowing it was unlicensed. Therefore Kvaerner could not enforce its contract with Steel Tec and consequently cannot recover on the performance bond because American's liability as a surety cannot be greater than that of its principal Steel Tec.
Part one of chapter 489 provides for the licensing, registration and certification of construction contractors. Section 489.128, Florida Statutes (1999) provided:
Contracts performed by unlicenced contractors unenforceable.—As a matter of public policy, contracts entered into on or after October 1, 1990, and performed in full or in part by any contractor who fails to obtain or maintain his license in accordance with this part shall be unenforceable in law or in equity. However, in the event the contractor obtains or reinstates his license, the provisions of this section shall no longer apply.3
Section 489.128 was enacted to protect the public from the activities of incompetent contractors. See § 489.101 (); Castro v. Sangles, 637 So.2d 989 (Fla. 3d DCA 1994). See also Poole & Kent Co. v. Gusi Erickson Const. Co., 759 So.2d 2 (Fla. 2d DCA 1999) ().
In Castro, the court recognized a party may recover upon an apparently illegal contract but only if he himself is not guilty of wrongdoing, that is, if he is not in pari delicto4 with the actual malefactor. In that case, the Castros agreed with Sangles, an unlicensed contractor, to build a duplex on their property for a low price. Castro pulled the building permit, claiming he was the owner/builder and no contractor was involved and signed an affidavit to that effect. When Sangles' construction proved unsatisfactory, the Castros filed suit against him for breach of contract. The trial judge dismissed the lawsuit on the basis that the contract was unenforceable under section 489.128.
On appeal, the court noted Castro was clearly in pari delicto since it was he who, for his own financial gain, made a specific representation to official authorities, under oath, that the building permit was expressly sought by the owner as builder. Castro thus disavowed the existence of the "general contractor" against whom he filed suit. The court agreed that Castro's improper securing of the building permit—which was contrary not only to his sworn affidavit and the county code but to Chapter 489 itself—precluded his recovery:
We cannot allow one to invoke the judicial process when, for his own financial benefit, he has participated in the very activity that law precludes, with the resulting danger that the law seeks to avoid.
In the present case, Hernando County stopped work on the project because Steel Tec was not licensed as a steel erection contractor, pursuant to ordinances 93-20 and 98-02. Section 7 of ordinance 93-20 requires certificates of competency:
Under ordinance 98-02, "Contracting" is defined as follows:
Contracting means, except as exempted in this part, engaging in business as a contractor and includes, but is not limited to, performance of any of the acts as set forth in the definition of "contractor" and "speciality contractor," which define types of contractors....
"Speciality contractor" is defined as a contractor whose scope of work and responsibility is limited to a particular phase of construction described in the following categories. These categories include steel erection contractor:
(15) Steel Erection Contractor means the scope of certification includes and is limited to the execution of contracts requiring the skill, knowledge, ability and experience to install, repair, maintain, and replace, steel framework, columns, sheathing, beams and fabrication of metal buildings.
Kveaerner's subcontract required Steel Tec to furnish all labor, material and equipment to complete the following:
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