Liability Of Secondary Qualifying Agents Pertaining To Civil Judgments

If you are a secondary qualifying agent for a company, there is potential for being financially responsible for the company you qualify. This stems from how the law shifts liability after a primary qualifying agent terminates their business relationship. Therefore, it is important to pay close attention to the status of the primary qualifying agent you do business with. That way, you can avoid construction industry licensing consequences if a civil judgment is entered against a company you qualify. Read on to find out what the law specifically says and how to protect yourself.

Florida Statutes Regarding Primary and Secondary Qualifying Agents:

In an effort to address this issue, we must first review the language contained in section 489.129(1)(q), Florida Statutes, which states:

(1) The board may take any of the following actions against any certificateholder or registrant: place on probation or reprimand the licensee, revoke, suspend, or deny the issuance or renewal of the certificate or registration, require financial restitution to a consumer for financial harm directly related to a violation of a provision of this part, impose an administrative fine not to exceed $10,000 per violation, require continuing education, or assess costs associated with investigation and prosecution, if the contractor, financially responsible officer, or business organization for which the contractor is a primary qualifying agent, a financially responsible officer, or a secondary qualifying agent responsible under s. 489.1195 is found guilty of any of the following acts:

(q) Failing to satisfy within a reasonable time, the terms of a civil judgment obtained against the licensee, or the business organization qualified by the licensee, relating to the practice of the licensee’s profession.

Construction Industry Licensing Board CILB Governing Department

The CILB is part of the Florida Department of Business & Professional Regulation

Origin of the Construction Industry Licensing Board:

The Florida Legislature enacted Chapter 489, Florida Statutes, for the purpose of regulating the construction industry.  In doing so, the Legislature created the Construction Industry Licensing Board (“CILB”). The Board’s purpose is to carry out the provisions of Chapter 489, Florida Statutes.  One of the functions of the CILB is to enact rules for the purpose of supplementing the Florida Statutes. They also provide guidance for the construction industry.  The CILB created Rule 61G4-17.001(1), Florida Administrative Code. This rule defines “reasonable time” as sixty (60) days following the entry of a civil judgment that is not appealed.  As a result, license holders do have a responsibility to satisfy civil judgments. They can be disciplined for failing comply with the statute and rule previously cited.

Responsibility of Secondary Qualifying Agents:

There are circumstances that alleviate financial responsibility for license holders. According to section 489.1195(2)(e), Florida Statutes, a secondary qualifying agent is not responsible for supervision of financial matters. However, there is an exception which creates financial responsibility for secondary qualifying agents.

According to section 489.1195(3)(c), Florida Statutes, if the primary qualifying agent terminates his/her status with the business organization, the business organization has 60 days to designate a new primary qualifying agent. If that doesn’t happen in time, all secondary qualifying agents will become primary qualifying agents, unless a joint agreement specifies differently. This provision is significant because primary qualifying agents, in most cases, are financially responsible for the business which they qualify; therefore, subject to disciplinary action from the CILB for financial violations.

Civil Judgment Concerns For Qualifying Agents

The 60 Day Clock Begins Ticking When A Primary Qualifying Agent Changes Their Status With A Company

CILB Action and Conclusion:

In most cases, secondary agents are not responsible for the financial matters of the company they qualify. Therefore, the CILB cannot discipline a secondary qualifying agent for failing to satisfy a civil judgment. Find out if liability could be shifted to you by understanding the primary qualifier’s status with the company.

CATEGORY: Florida Construction Industry Law Blog Practice Areas: ,