Unlicensed work doesn’t void condo contract, says Florida Court of Appeals

Being unlicensed as a contractor in Florida does not necessarily void a storm remediation contract, a Florida appeals court said in a decision that could affect insurance defense strategy in hurricane claims.

“It shows that it’s really important to know the scope of work that’s going on,” said Josh Beck, an insurance attorney in Boca Raton.

Florida 3^st The U.S. District Court of Appeals last week overturned a Monroe County circuit judge’s decision in three lawsuits filed by mold remediation contractor Incident365 Florida against the Ocean Pointe Condominium Associations. The circuit judge agreed with the condo associations that Incident365 was not a licensed contractor, voiding a repair contract.

But the appeals judges said the situation is not so bad.

The cases stemmed from damage to a condo complex in the Upper Keys in Hurricane Irma in 2017. These were not benefit award disputes, but could affect some AOB disputes that remain after Florida’s 2022 legislative changes, as well as claims more recent involving directives. – to pay, said Beck. He was not associated with the Ocean Pointe case, but handled AOB and other insurance claims litigation.

The decision does not remove the defense that an unlicensed contractor’s work is an unenforceable contract in all cases, Beck said. But it’s more important “to figure out if the contractor was licensed for the type of work being done and if they have to meet the statutory requirements,” he said. Similar cases are likely to emerge after the damage from Hurricanes Helene and Milton becomes clear.

Incident365 was hired by the condos for $1.4 million to dry out the buildings and mitigate mold that spread after storm water ingress. The condo association paid about $400,000 but refused to pay more, the appeals court explained. Incident360, with offices in St. Petersburg and Pennsylvania, filed suit, alleging breach of contract.

Ocean Pointe argued that Incident365 was not a licensed contractor as required by Florida statutes. The remediation company engaged in significant demolition and remodeling work at the apartment buildings, along with drywall and mold work. But she was not authorized to carry out construction work, which makes the contract unenforceable, lawyers for the condominiums argued.

The lower court agreed and granted summary judgment in favor of the condominium associations. The wording of the Florida statute is a bit contradictory, and the lower court relied on the dictionary definitions of “repair,” “improvement,” and “contractor.”

But looking at the bigger picture, the appeals judges found that Florida law does not specify that mold removal firms must be licensed as building contractors.

“Considering the terms in their ‘specific context’ rather than in ‘isolation,’ we disagree with the trial court’s holding that a building contractor’s license is required for the undisputed scope of work completed in six of the seven ‘tasks disaster recovery” labels. here between the parties as: water damage mitigation; general dehumidification; structural dehumidification; disposal of materials off-site; antimicrobial application; and mold remediation as necessary,” Judge Monica Gordo wrote for the 3^st DCA panel.

The justices explained that following the lower court’s logic would mean that virtually any work done for a homeowner would require a contractor’s license.

“For example, if a homeowner hired someone for compensation to clean their home and, during the cleaning process, that person cleaned toilets and vacuumed and cleaned floors, the first part of section 489.105(3) ( contractor’s license status) would be satisfied because this process resulted in the “decrease(ion)” of dirt and dust from the building,” the appeals court wrote.

Citing a 2016 Florida appeals court decision, the justices said courts should avoid an interpretation of the statute that leads to an absurd result.

The mold contractor requested that the mold remediation work be separated to allow payment for at least the non-structural work performed on the condominiums. The appeals judges did not address that question directly, but sent the case to Monroe Circuit Court for further proceedings.

The full opinion in the condominium cases can be seen here.