RAM OF SO. FL., INC. v. WCI Communities, Inc.

869 So. 2d 1210, 2004 WL 591476
CourtDistrict Court of Appeal of Florida
DecidedMarch 26, 2004
Docket2D03-284
StatusPublished
Cited by22 cases

This text of 869 So. 2d 1210 (RAM OF SO. FL., INC. v. WCI Communities, Inc.) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
RAM OF SO. FL., INC. v. WCI Communities, Inc., 869 So. 2d 1210, 2004 WL 591476 (Fla. Ct. App. 2004).

Opinion

869 So.2d 1210 (2004)

R.A.M. OF SOUTH FLORIDA, INC., and George Miquel, Appellants,
v.
WCI COMMUNITIES, INC., Appellee.

No. 2D03-284.

District Court of Appeal of Florida, Second District.

March 26, 2004.

*1213 Sharon Kung and David J. Valdini of Valdini & Palmer, P.A., Fort Lauderdale, for Appellants.

Kelley Geraghty Price of Cummings & Lockwood, LLC, Naples, for Appellee.

CANADY, Judge.

R.A.M. of South Florida, Inc., a subcontractor, appeals the trial court's ruling that its contract action and lien claim against the appellee, WCI Communities, Inc., are based on an unenforceable contract. Because we conclude that R.A.M.'s claims were properly barred by a statutory provision prohibiting the enforcement of illegal construction contracts, we affirm the decision of the trial court.

At the outset, we note that the illegality and unenforceability of the construction contract-which contained an arbitration provision-was an issue to be decided by the trial court rather than by the arbitrator. See § 682.03(1), Fla. Stat. (2000); Riverwalk Apts., L.P. v. RTM Gen. Contractors, Inc., 779 So.2d 537, 538 (Fla. 2d DCA 2000) ("A party who alleges and offers colorable evidence that a contract containing an arbitration clause is illegal cannot be compelled to arbitrate the threshold issue of the existence of the agreement to arbitrate; only a court can make that determination."); see also Island House Developers, Inc. v. Amac Constr., Inc., 686 So.2d 1377 (Fla. 1st DCA 1997).[1]

I. BACKGROUND

A. Facts of the Case

On May 10, 2000, WCI and R.A.M. executed a standard form contract for construction work in which R.A.M. agreed to perform concrete and masonry work for WCI's "Bay Club at the Colony" project, a club facility located in the Pelican Landing subdivision in Fort Myers. George Miquel, R.A.M.'s president, signed the contract on behalf of R.A.M. At the time the contract was signed, neither R.A.M. nor Miquel were licensed to perform the construction work required under the contract.

R.A.M. began its work in late May of 2000. During the course of construction, a dispute arose between R.A.M. and WCI regarding the quality and timeliness of the work being performed by R.A.M. As a result of this dispute, WCI refused to pay certain sums due under the contract. In response to WCI's nonpayment, on January 28, 2001, R.A.M. recorded a claim of lien against the real property on which the *1214 work was done. In January of 2001, R.A.M. ceased all work on the project.

Subsequently, R.A.M. filed a cross-claim against WCI in litigation which had been initiated by a third party against both R.A.M. and WCI. This cross-claim sought to enforce the claim of lien and also sought damages for breach of contract and unjust enrichment. WCI responded to the cross-claim by invoking a clause in the contract between R.A.M. and WCI that required binding arbitration of disputes arising out of the contract.

During arbitration, WCI became aware that R.A.M. and Miquel were not licensed contractors. Following this discovery, WCI filed an action seeking a declaratory judgment that the contract between WCI and R.A.M. was illegal and unenforceable and a judgment discharging R.A.M.'s lien. WCI also filed a motion to stay the arbitration pending a judicial determination of the enforceability of the contract.

The trial court held a hearing on the motion to stay the arbitration. At the hearing, the parties agreed that the material facts relating to the enforceability of the contract were undisputed. Specifically, the parties agreed that R.A.M. and Miquel were not licensed to perform the construction when the work was performed. However, both parties also agreed that R.A.M. and Miquel did become licensed on October 25, 2002, more than two years after the construction work began and more than a year and a half after it was terminated. It was also agreed that the legal issue of the enforceability of the contract was ripe to be decided.

The trial court granted WCI's motion to stay the arbitration, ruled that the contract between R.A.M. and WCI was illegal and unenforceable pursuant to section 489.128, Florida Statutes (2000), and discharged R.A.M.'s lien on WCI's property. R.A.M. now appeals those rulings.

B. The Statutory Framework

This case turns on whether R.A.M.'s claims were properly barred by the provisions of section 489.128:

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 [i.e., part I, chapter 489] shall be unenforceable in law or in equity.

An earlier version of this statute, which was in force in May of 2000 when the contract between R.A.M. and WCI was executed and work on the construction project began, contained an additional provision allowing a contractor to cure the contractor's unlicensed status. Under this earlier version of the statute, when such a cure was effected by a contractor the otherwise unenforceable contract would become enforceable. This earlier version of the statute—codified in the 1999 Florida Statutes—was identical to the version in the 2000 Florida Statutes, except that it contained an additional sentence at the end of the section: "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). This cure provision present in the 1999 statute was repealed by the legislature effective July 1, 2000. See ch. 00-372, § 35, at 4338 (repealing cure provision), § 48, at 4344 (providing effective date of July 1, 2000), Laws of Fla.[2]

*1215 The provisions of section 489.128 concerning the enforcement of contractual rights under construction contracts performed or entered into by unlicensed contractors should be viewed in the context of section 489.127(1)(f), Florida Statutes (1999), which makes it a crime for any person to "[e]ngage in the business or act in the capacity of a contractor ... without being duly registered or certified as having a certificate of authority."

II. ISSUE ON APPEAL

The dispositive issue on appeal is whether R.A.M. was entitled to cure its unlicensed status pursuant to section 489.128, Florida Statutes (1999), when the cure provision of the statute was no longer in force. R.A.M. contends it was entitled to obtain the benefit of the provisions of the statute in force when it entered the construction contract with WCI. R.A.M. argues that the 2000 version of the statute cannot be applied to remove R.A.M.'s vested right granted by the 1999 version of the statute to cure its unlicensed status. In support of its position, R.A.M. relies on Palms v. Magil Construction, Inc., 785 So.2d 597, 598 (Fla. 3d DCA), review denied, 805 So.2d 811 (Fla.2001), which held that "the 2000 amendment" to section 489.128 "does not operate retroactively," and thus would not be applied to a suit that was pending when the 2000 version of the statute became effective.

WCI argues that the enforcement of the 2000 version of the statute properly foreclosed the ability of R.A.M. to cure its unlicensed status after the effective date of the 2000 amendment. WCI contends that the 2000 amendment to the statute is a remedial measure and that application of that amendment does not abrogate or impair any vested right of R.A.M.

III. ANALYSIS

A. Legal Principles Governing the Analysis of Retroactivity Issues

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