Introduction 302 16. 02 Unlicensed Contracting 302 16. 03 Statute of Frauds 303

16.01 Introduction 302

16.02 Unlicensed Contracting 302

16.03 Statute of Frauds 303

16.04 Statute of Limitations 304

16.05 Statute of Repose 305

16.06 Illegality 306

Chapter 16: Statutory Defenses

16.01 Introduction

The defenses set forth below are some of the most common statutory defenses. While there are commonalities among these defenses, they are, by definition, creatures of state legislatures and, thus, are not completely identical. Review the governing statutory language carefully to ensure that the jury instruction is consistent with that language.

16.02 Unlicensed Contracting

As a matter of public policy, contracts entered into on or after [insert date applicable to the state in which the action is pending] by an unlicensed contractor are unenforceable in law or equity by the unlicensed contractor. As a defense for the owner, the issue for your consideration is whether the contractor was required to have or maintain a license for the work required under the contract. A contractor shall only be considered unlicensed on the date the parties made their agreement for the work. If the contract does not have a date, then you should consider the first day the contractor provided labor, services, and/or materials as the contract date.

If you determine by the greater weight of the evidence that the contractor was required to have or maintain a license but did not have one, then your verdict should be for the owner. If, however, the greater weight of the evidence does not support the defense of the contractor on this issue [you shall consider the following additional defenses] [your verdict should be for the owner in the full amount of its damages].

Comment

The laws pertaining to the capacity of unlicensed contractors to enforce contracts and, thus, the consequences of violating licensure statutes, vary across the states. It is important to instruct the jury based upon the licensure laws in effect in the state whose laws govern the matter. As a general rule, construction contracts are void as against public policy if the contractor entering into such contract did not meet the licensure requirements of the state whose laws govern. However, each state’s laws are different, and exceptions and exemptions must be considered. See Hydrotech Sys. Ltd. v. Oasis Waterpark, 803 P.2d 370 (Cal. 1991); Twenty-Nine Palms Enters. Corp. v. Bardos, 149 Cal. Rptr. 3d 52 (Ct. App. 2012); Cent. Fla. Lumber Unlimited Inc. v. Qaqish, 12 So. 3d 766 (Fla. Dist. Ct. App. 2009); Boatwright Constr. LLC v. Tan, 958 So. 2d 1071 (Fla. Dist. Ct. App. 2007); Scott & Son Eng’g Inc. v. Tarafa Constr. Inc., 907 So. 2d 553 (Fla. Dist. Ct. App. 2005); RTM Gen. Contractors Inc. v. G/W Riverwalk LLC, 893 So. 2d 583 (Fla. Dist. Ct. App. 2004); JR Constr./Elec. LLC v. Ordner Constr. Co., 669 S.E.2d 224 (Ga. Ct. App. 2008); B&F Bldg. Corp. v. Liebig, 564 N.E.2d 650 (N.Y. 1990); Vanguard Constr. & Dev. Co. v. Polsky, 879 N.Y.S.2d 300 (App. Div. 2009).

16.03 Statute of Frauds

As a defense for the defendant, the issue for your consideration is whether the plaintiff’s claim is barred by the statute of frauds. The statute of frauds bars the enforcement of an oral contract for [the payment of a debt of another] [performance of a contract to occur within a year] [sale of goods under $___]. The defendant claims the oral contract in this case was for [the payment of a debt of another] [performance of a contract to occur within a year] [sale of goods under $___] and therefore invalid.

If the greater weight of the evidence supports the defense of the defendant on this issue, your verdict should be for the defendant. If, however, the greater weight of the evidence does not support the defense of the defendant on this issue [you shall consider the following additional defenses] [your verdict should be for the plaintiff in the full amount of its damages].

Comment

See Yamaha Motor Corp. USA v. Calhoun, 516 U.S. 199 (1996), Peterson v. Paxton-Pavey Lumber Co. of Florida, 135 So. 501 (Fla. 1931), and Smith v. Royal Automobile Group Inc., 675 So. 2d 144 (Fla. Dist. Ct. App. 1996). See also Fla. Stat. Ann. §§ 672.201, 672.206, 725.01–.08 and Fla. R. Civ. P. 1.969.

16.04 Statute of Limitations

As a defense for the defendant, the issue for your consideration is whether the plaintiff’s claim is barred by a statute of limitations. To find that the plaintiff’s claim is barred by a statute of limitations, you should consider whether or not the plaintiff’s causes of action and items of damage accrued within the time prescribed by [identify statute of limitations] before this action was brought. In this case, the particular statute of limitations reads:

[read statute of limitations applicable to case].

If the greater weight of the evidence supports the defense of the defendant on this issue, then the plaintiff’s claim is time barred and your verdict should be for the defendant. If, however, the greater weight of the evidence does not support the defense of the defendant on this issue [you shall consider the following additional defenses] [your verdict should be for the plaintiff in the full amount of its damages].

Comment

Major League Baseball v. Morsani, 790 So. 2d 1071 (Fla. 2001); Fed. Ins. Co. v. Sw. Fla. Ret. Ctr. Inc., 707 So. 2d 1119 (Fla. 1998); Pierson D. Constr. Inc. v. Yudell, 863 So. 2d 413 (Fla. Dist. Ct. App. 2003); Alexander v. Suncoast Builders Inc., 837 So. 2d 1056 (Fla. Dist. Ct. App. 2002); Otis Elevator Co. v. Theodore, 677 So. 2d 966 (Fla. Dist. Ct. App. 1996); Elizabeth N. v. Riverside Grp. Inc., 585 So. 2d 376 (Fla. Dist. Ct. App. 1991); Dubin v. Dow Corning Corp., 478 So. 2d 71 (Fla. Dist. Ct. App. 1985); Engle v. Acopian, 432 So. 2d 113 (Fla. Dist. Ct. App. 1983); Minn. R. Civ. P. 8.03.

One of the more heavily litigated topics in this area is that of accrual—that is, when a claim does accrue for purposes of the statute of limitations. In the construction context, the accrual rules vary from state to state. In Washington, for example, Rule 4.16.310 provides:

All claims or causes of action as set forth in RCW 4.16.300 shall accrue, and the applicable statute of limitation shall begin to run only during the period within six years after substantial completion of construction, or during the period within six years after the termination of the services enumerated in RCW 4.16.300, whichever is later.

Wash. Rev. Code Ann. § 4.16.310; see also Indus. Risk Insurers v. Rust Eng’g Co., 283 Cal. Rptr. 873 (Ct. App. 1991); Du v. Hawkins, 2013 Cal. App. Unpub. LEXIS 1456 (Feb. 27, 2013) (statute of limitations runs upon substantial completion of work); Frank v. Mazs Grp. LLC, 30 A.D.3d 369, 369–70 (N.Y. Super. Ct. App. Div. 2006) (design defect claims accrue “upon the actual completion of the work to be performed and the consequent termination of the professional relationship”).

Some states also draw a distinction between latent and patent defects and adjust the accrual date based upon that distinction. See, e.g., Fla. Stat. Ann. § 95.11(3)(c).

16.05 Statute of Repose

As a defense for the defendant, the issue for your consideration is whether the plaintiff’s claim is barred by a statute of repose. To find that the plaintiff’s claim is barred by a statute of repose, you should consider whether the plaintiff’s causes of action and items of damage did not arise because the claim was not brought within the period of time determined by the state legislature to be applicable to the claim at issue. In this case, the statute of repose requires a claim for [name the claim] to be brought within [number of years set forth in the statute of repose at issue].

If the greater weight of the evidence supports the defense of the defendant on this issue, then the plaintiff’s claim is barred and your verdict should be for the defendant. If, however, the greater weight of the evidence does not support the defense of the defendant on this issue [you shall consider the following additional defenses] [your verdict should be for the plaintiff in the full amount of its damages].

Comment

Statutes of repose and statutes of limitation both operate to bar claims based upon a time-related trigger. Yet a statute of repose operates notwithstanding the fact that the claim may not have yet accrued. In this sense, a statute of repose not only bars causes of action but can also extinguish them or prevent them from ever coming into existence. As one court explained, a statute of repose “does not affect the court’s jurisdiction; rather, statutes of repose, like statutes of limitation, attach to and bar only the claim itself.” In re Estates of Palmer, 187 P.3d 758, 763 (Wash. Ct. App. 2008).

16.06 Illegality

If enforcement of a contract is contrary to the public policy of this state, violates a statute, or violates the constitution, the contract need not be enforced. In other words, if a contract contains a clause that is illegal, you should not enforce the illegal terms, because a contract cannot give validity to an otherwise illegal act. There is no remedy for that which is illegal. When a contract contains both legal and illegal terms, the illegal terms can be refused without nullifying the contract as a whole, and you should consider the valid portions of the contract.

As a defense for the defendant, the issue for your consideration is whether the contract between the parties required the defendant to perform an illegal act or contained an illegal clause. The [provision in the contract] that the defendant claims is illegal is [insert illegal provision or required illegal act].

If you determine by the greater weight of the evidence that the contract required the defendant to perform an illegal act, then your verdict should be for the defendant. If, however, the greater weight of the evidence does not support the defense of the defendant on this issue [you shall consider the following additional defenses] [your verdict should be for the plaintiff in the full amount of its damages].

Comment

Title Trust Co. of Fla. v. Parker, 468 So. 2d 520 (Fla. Dist. Ct. App. 1985); Mclntyre v. Norman, 429 So. 2d 1296 (Fla. Dist. Ct. App. 1983); Armco Drainage & Metal Prods. Inc. v. Cnty. of Pinellas, 137 So. 2d 234 (Fla. Dist. Ct. App. 1962).