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As a General Contractor, What Licenses Do You Really Need?

March 1, 2011

Florida - Construction

Key Points:

  • Does a general contractor need more then just a building license?
  • Potential liability issues or exposure for a GC actually doing work on a job site without the appropriate license.
  • Is the failure to have an appropriate license negligence per se?

 

In dealing with construction cases involving both construction-related injury claims and construction defect claims, we typically deal with two situations involving the work of general contractors. In the first situation, the general contractor is a "paper" contractor in which all the work on the project is subbed out to subcontractors. The second scenario is where the majority of the work is subbed out to subcontractors and the general contractor does certain miscellaneous portions of work on the project that can vary from project to project. It is in this latter situation that I recently came upon allegations that my client, a general contractor, did not have the appropriate license as required by state law to perform some of these miscellaneous items on a project.

In my case, I represented a general contractor who contracted with a couple to build a residential home for them in a rather exclusive neighborhood in northern Florida. For the most part, my client subcontracted out all of the work to licensed subcontractors such as electricians, plumbers, etc. In this home, the homeowners contracted for an outdoor kitchen and/or lanai area in conjunction with their screened-in pool and hot tub off the back of their home. As part of this outdoor kitchen/lanai area, the homeowners were offered and opted to have a gas grill installed in the outdoor kitchen area.

On other similar homes, the general contractor subcontracted out the installation, or stub out, of the gas line and the hook up of the gas grill to a licensed gas company. In this specific home, the general contractor subcontracted out the stub out of the gas lines with its usual gas company contractor, but the homeowners wanted to use another gas company to install the underground tank and connect it to the gas grill. What this meant for the general contractor was that, when the gas grill was delivered to the home, the general contractor took the grill out of its box and placed it in the cavity or hole in the cabinet that the general contractor's subcontractor had built in the outdoor kitchen area. The general contractor was not getting involved in the installation of the gas lines or tank or with the connections of the stub out to the gas connections to the gas grill itself. This was done by the gas company hired and contracted for by the homeowners.

In reviewing these facts, it would seem that the work done by the general contractor, taking the grill out of its box and placing it in the cabinet, was somewhat of an innocuous task. During the course of this litigation, we learned otherwise.

This case involved a gas grill explosion in the gas grill some 2 1/2 years after it was installed, hooked up and the Certificate of Occupancy issued. The homeowners sued the gas grill manufacturer, the two gas companies, as well as the general contractor. The claims against the manufacturer were based upon product liability, while the claims against the general contractor and the two gas companies were based upon negligence.

As part of the claim for negligence against the general contractor, we came to find out that under Florida law, an individual or entity, other than the actual homeowner or customer, who takes a gas grill out of a box and installs it in a cavity or hole in a cabinet or otherwise is required to have an Installer C LP Gas License. This came as a surprise to the general contractor, our expert and us.

Under Florida Statute 527.01, an LP Gas Installer has been defined to mean "any person who is engaged in the liquefied petroleum gas business and whose services include the installation, servicing, altering or modifying of apparatus, piping, tubing, tanks and equipment for the use of liquefied petroleum (LP Gas) or natural gas in selling or offering to sell, or leasing or offering to lease, apparatus, appliances, and equipment for the use of liquefied petroleum or natural gas."

Further, under Section 5F-11.012 of the State of Florida Division of LP Gas Statutes and Administrative Codes, it indicates under Section (1)(b), "Installer C is any person engaged in the liquefied petroleum gas business whose services include installing, servicing, altering, or modifying appliances, equipment, piping, or tubing to convey liquefied petroleum gas to appliances or equipment in selling or offering to sell, leasing, or offering to lease appliances equipment for the use of liquefied petroleum gas. The scope of work that may be performed by an Installer C does not include installing, servicing, altering, or modifying liquefied petroleum gas motor fuel systems, liquefied petroleum gas equipment, appliances, or systems on recreational vehicles or liquefied petroleum gas containers or container assemblies."

We followed up with the State of Florida Division of LP Gas and were advised that by taking the grill out of the box and placing it in the cavity in the outdoor kitchen cabinet, a general contractor was required to have an Installer C License. Failure to have this license is considered a third degree felony punishable as provided in Florida Statute 775.082, 775.083, or 775.084 if it is proven that the person or entity intentionally or willfully engaged in any said activities without first obtaining the appropriate licensure from the department.

Due to the significance of this to the liability factors in our case, we dug into this issue further. The question was whether or not taking the grill out of the box and placing it in the cavity in the cabinet amounted to installation. Our query was prompted because there was no definition of installation in either of the Florida statutes or in the LP Gas Statutes or Administrative Codes. What we found out and were provided with was a March 25, 1958, Biennial Report of the Attorney General for the State of Florida, who was asked the following queries:

1. A plumber sales an LP Gas water heater to a consumer, sets it in place in the consumer's home, connects water lines and then calls a licensed LP Gas dealer to connect the gas lines and regulate the gas burner. Is the plumber an installer within the meaning of the LP gas laws?

2. A heating contractor sales an LP Gas warm air furnace, sets it in place in a consumer's home, runs air ducts and has a licensed LP Gas dealer connect gas lines to the heater. Is the heating contractor an installer within the meaning of the LP gas laws?

These scenarios seemed similar to our case.

The Attorney General for the State of Florida responded, "It seems to me that any act to, or in connection with, any appliance or piece of equipment at the place where it is to be put into service is an active installation. This would include attaching the appliance or a piece of equipment to a building, connecting the appliance or piece of equipment to water lines or air ducts or attaching a flue. Any of these acts are potentially dangerous to the public and should be done only by those who are qualified and have proven their financial responsibility in case of any injury or damage for which they are responsible. Accordingly, both questions are answered in the affirmative."

In our case the homeowners were pushing hard on this issue as to the general contractor. This was an issue that we felt would give us a lot of trouble at trial because, under Florida law, an individual who holds the permit, typically the general contractor, is responsible for job site safety and compliance with the applicable building codes, which would include the "installation" of the gas grill. Hunt v. Dept. of Professional Regulation, 444 So.2d 997 (1st DCA 1983) and Stoner v. Dept. of Professional Regulation, 429 So.2d 27 (5th DCA 1983).

Based upon this, we started looking for a way to deal with this issue. What we found was a line of cases in Florida, mostly criminal, dealing with individuals involved in automobile accidents while driving vehicles whose licenses were either revoked or suspended. In those cases, the Florida Supreme Court indicated and held that it was not the act of not having a license which caused the accident or injury. It indicated the state had the burden of establishing causation, i.e. the loss sustained by the victim was as a result of the offense. Glaubius v. State, 688 So.2d 913 (Fla. 1997) and Schuette v. State, 822 So.2d 1275 (Fla. 2002).

The Court indicated, "The suspension of a license was an existing circumstance rather than a cause of the accident. Although it is undisputed that Schuette was driving illegally by driving with a suspended license, the State failed to present any evidence in relationship-much less prove by preponderance of the evidence-to establish that the accident resulting damages were caused by, or related to the Defendant's act of driving without a license." Schuette v. State, 822 So.2d 1275 (Fla. 2002).

The vast majority of jurisdictions hold that a violation of a driver's license is not evidence of negligence in the absence of some causal connection between the violation and the injury. The requirement of a causal connection for evidence of a violation to be admissible should not be confused with the proximate cause element of a tort action for negligence. Schuette v. State, 822 So.2d 1275 (Fla. 2002) citing Brackin v. Boles, 452 So.2d 540, 542 (Fla. 1984).

Based upon this, we were able to argue that, even though the general contractor did not have the Installer C License, this did not mean that its actions were the cause or had a causal relationship to the injuries and damages sustained by the homeowner in this gas explosion.

This entire case left us with the thought that each general contractor needs to be aware of what licenses may or may not be required, even with what it believes may be miniscule or minor work on a construction site.

*John is a shareholder in our Jacksonville, Florida, office. He can be reached at (904) 358-4221 or jjviggiani@mdwcg.com.

Defense Digest, Vol. 17, No. 1, March 2011

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