Promontory Enterprises, Inc. v. SOUTHERN ENGIN. & CONTRACT., INC.

• Decision Date: 02 January 2004
• Docket Number: No. 5D03-495.,5D03-495.
• Citation: 864 So.2d 479
• Parties: PROMONTORY ENTERPRISES, INC., et al., Appellants, v. SOUTHERN ENGINEERING & CONTRACTING, INC., Appellee.
• Court: Florida District Court of Appeals

864 So.2d 479

PROMONTORY ENTERPRISES, INC., et al., Appellants, v. SOUTHERN ENGINEERING & CONTRACTING, INC., Appellee.

No. 5D03-495.

District Court of Appeal of Florida, Fifth District.

January 2, 2004.

Matthew Triggs, David J. George, Joelle C. Sharman and Stephanie Reed Traband of Proskauer Rose LLP, Boca Raton, for Appellants.

Robert Hoofman and Charles R. George, III of Rush, Marshall, Jones & Kelly, P.A. and L. Bruce Stout, Roswell, Georgia, for Appellee.

SAWAYA, C.J.

Promontory Enterprises, Inc. and the surety, Highlands Insurance Company, (collectively referred to as Promontory) appeal the order denying their Emergency Motion to Stay Arbitration with the plaintiff, Southern Engineering & Contracting, Inc. The motion emanated from Southern's breach of contract action involving a construction contract entered into at a time when Southern allegedly did not have a contractor's license. The construction contract, and thus the arbitration clause therein, are unenforceable, Promontory contends, because Southern did not have a license at the time it entered into the contract.

Southern argues that the 2003 amendments to section 489.128, Florida Statutes, should be retroactively applied to the instant case and that under that statute, it was licensed and it may therefore enforce the contract and the arbitration provision contained therein. Promontory argues that the 2000 version of section 489.128 applies and that under that statute, the contract containing the arbitration clause is unenforceable. Hence the issue we must resolve is which version of section 489.128 applies. In order to resolve this issue, we will discuss the factual background of the instant case and the general principles of retroactivity, and then we will apply those principles to both versions of section 489.128 to reach a conclusion.

Factual Background

Promontory, an operator of a bookstore, entered into a contract, complete with arbitration clause, with Southern on June 20, 2000, that required Southern to construct a new bookstore for Promontory. Although Southern obtained a permit, it never actually began construction. Consequently, Promontory terminated the contract and hired another contractor. On May 8, 2001, Southern filed a breach of contract action. Shortly before what was to have been the final hearing in the arbitration process, Promontory discovered that Southern was not a licensed general contractor at the time it entered into the contract. Promontory filed the stay motion asking the trial court to stay the final arbitration until such time as the court could determine whether the contract was enforceable.

At the hearing on the stay motion, which predated the 2003 amendment to section 489.128, the central issue argued to the trial court was whether the 1999 or 2000 version of section 489.128, Florida Statutes, applied. The 1999 version of the statute provided:

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 a license in accordance with this part shall be unenforceable in law or in equity. However, in the event the contractor obtains or reinstates his or her license, the provisions of this section shall no longer apply.

§ 489.128, Fla. Stat. (1999). Effective July 1, 2000, the statute was amended to delete the last sentence and eliminate the cure provisions contained therein. Ch. 00-372, §§ 35, 48, at 3143, 3147, Laws of Fla.

Promontory argued that the 2000 amendment should be applied retroactively and the fact that Southern belatedly obtained its license does not matter. This argument is premised on the deletion of the cure provision in the 2000 version of section 489.128. Without the cure provision, the contract was unenforceable at the time it was entered into and remained so even after Southern obtained its license.

Southern's argument centered on the applicability of the cure provision in the 1999 statute. Because it had the right to cure its unlicensed status and thereby render the contract enforceable, the arbitration clause contained therein is like the contract as a whole—enforceable. Southern contended that the 2000 version cannot be retroactively applied because it had a vested right to cure at the time it entered into the contract. To apply the 2000 version would abrogate its vested right, argued Southern, and therefore the 1999 version, not the 2000 version, applied.

During the pendency of this appeal, the Legislature enacted the 2003 version of section 489.128. The 2003 amendment provides in pertinent part:

As a matter of public policy, contracts entered into on or after October 1, 1990, by an unlicensed contractor shall be unenforceable in law or in equity by the unlicensed contractor.

§ 489.128(1), Fla. Stat. (2003). The Legislature also included other provisions not previously included in the prior versions of the statute. For example, the 2003 version of the statute provides that "[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." § 489.128(1)(a), Fla. Stat. (2003). The statute also notably provides that "an individual or business organization shall not be considered unlicensed for failing to have an occupational license certificate issued under the authority of chapter 205" and that "[a] business organization shall not be considered unlicensed for failing to have a certificate of authority as required by ss. 489.119 and 489.127." § 489.128(1)(b), Fla. Stat. (2003).

The enactment of the 2003 version of section 489.128 was not unanticipated by Southern. In the Appendix to its brief, Southern had included a copy of the bill containing the 2003 statute that was pending in the Legislature at the time this appeal was instituted. Moreover, Southern, in its Answer Brief, had argued the provisions of the then pending bill containing the 2003 statute. When the 2003 version was enacted into law, Southern filed a notice of supplemental authority bringing this fact to our attention. This court then ordered that each party provide supplemental briefs regarding the issue of the retroactive application of the 2003 version of section 489.128 to the instant case.

At first blush, it would seem ironic that Southern would seek application of the 2003 version of the statute to the instant case given the fact that it does not contain a cure provision, until it is realized that the new provisions contained in the 2003 statute actually benefit Southern. Specifically, the facts below established that Southern was unlicensed because it did not have a certificate of authority. However, section 489.128(1)(b), Florida Statutes (2003), provides that a business organization is not considered unlicensed if it does not have the certificate of authority required under sections 489.119 and 489.127. Therefore, if the 2003 version of section 489.128 is applicable to the instant case, Southern would be considered a licensed contractor and may seek enforcement of the contract. In order to resolve which version of section 489.128 is applicable, we must first discuss the general principles of retroactivity that apply to legislative enactments.

General Principles of Retroactivity

It is firmly established that a statute may be retroactively applied if: 1) there is clear evidence that the Legislature intended to apply the statute retroactively; and 2) retroactive application is constitutionally permissible. Campus Communications, Inc. v. Earnhardt, 821 So.2d 388, 395 (Fla. 5th DCA 2002) (citing Metropolitan Dade County v. Chase Fed. Hous. Corp., 737 So.2d 494 (Fla.1999)), review denied, 848 So.2d 1153 (Fla.), and cert. denied, ___ U.S. ___, 124 S.Ct. 821, 157 L.Ed.2d 698 (2003); see also Romine v. Florida Birth Related Neurological Injury Comp. Ass'n, 842 So.2d 148 (Fla. 5th DCA),

review denied, 857 So.2d 195 (Fla. 2003). In Earnhardt, this court explained the first inquiry:

The first inquiry poses a question of statutory construction and requires application of a legal presumption which provides that statutes, in the absence of clear legislative intent to the contrary, should apply prospectively. Legislative intent must be determined primarily from the language of the statute and "[w]hen the language of the statute is clear and unambiguous and conveys a clear and definite meaning, there is no occasion for resorting to the rules of statutory interpretation and construction; the statute must be given its plain and obvious meaning." Holly v. Auld, 450 So.2d 217, 219 (Fla.1984) (quoting A.R. Douglass, Inc. v. McRainey, 102 Fla. 1141, 137 So. 157 (1931)); see also Rollins v. Pizzarelli, 761 So.2d 294, 297 (Fla.2000)

; Chase Federal,

737 So.2d at 500 ("Of course, where the language of a statute contains an express command that the statute is retroactive, there is no need to resort to these canons of statutory construction.") (citations omitted); Modder v. American Nat'l Life Ins. Co., 688 So.2d 330, 333 (Fla.1997).

Earnhardt, 821 So.2d at 395.

Generally, unless the Legislature clearly expresses its intention to the contrary, substantive statutes are presumed to apply prospectively while remedial statutes are presumed to apply retrospectively. Earnhardt; Kerr Const., Inc. v. Peters Contracting, Inc., 767 So.2d 610 (Fla. 5th DCA 2000). Regardless of the nature of the statute, once the legislative intent is determined, the second inquiry must be addressed to determine whether retroactive application of the statute is constitutionally permissible. Romine; Earnhardt. "In instances where the Legislature clearly expresses the intent that a statute is to be given retrospective application, as in the instant case, the courts will refuse to apply the statute retroactively `if the statute impairs vested rights, creates new obligations, or imposes new penalties.'" Ea...