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September 1st, 2017
construction
FEDERAL COURT HOLDS AN ALABAMA SUBCONTRACTOR WITHOUT A PROPER LICENSE CANNOT ENFORCE ITS CONTRACT WITH A ROOFING SUPPLIES DISTRIBUTOR

In Am. Builders & Contractors Supply Co. v. Precision Roofing & Consulting, LLC, No. 2:17CV97-WHA, 2017 WL 3431844, (M.D. Ala. Aug. 9, 2017), the United States District Court for the Middle District of Alabama dismissed a breach of contract claim filed against a distributor that provided supplies to a roofing subcontractor in light of the plaintiff, a subcontractor, having failed to obtain its own license at the time work commenced.

Precision Roofing & Consulting, LLC (“Precision”) was engaged in the business of installing and maintaining commercial and industrial roofs. ABC distributes and sells roofing material, which Precision ordered from ABC and installed as roofs at hundreds of locations throughout its territory. Beginning in 2011, Precision began to receive reports from customers about defects in roofs installed using ABC's roofing material. Precision alleged that the roofing material was not designed or manufactured consistent with the heat and humidity present in the southeastern United States and filed suit against ABC for, in part, breach of contract.

Pursuant to Alabama law, unlicensed contractors are barred from bringing lawsuits in Alabama to enforce contracts exceeding a certain amount, or any claims derived from those contracts. See Hawkins v. League, 398 So. 2d 232 (Ala. 1981). Precision, who was unlicensed in the State of Alabama, argued that despite the licensing requirement it nonetheless could proceed on it claim against ABC because the general contractor on site at the time work was completed held a valid general contractor’s license.

The Middle District of Alabama found no case law to support Precision’s theory that Alabama’s licensing requirement was only applicable to general contractors or that a subcontractor could work under the scope of the general contractor’s license to comply with the law.  The Court held that, Precision, as an admitted unlicensed subcontractor, could not sue for damages arising out of a contract for construction and dismissed the claim.

This case is good reminder that anyone engaged in the practice of construction in Alabama is required to carry a license and may not rely upon the license of the general contractor.  When a construction claim is filed, it is imperative to ensure the party seeking to enforce the contract was in fact licensed at the time it performed work. If not, it could be precluded from bringing suit, regardless of the specific facts or issues of the case.

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