Law School Case Brief
Murthy v. N. Sinha Corp. - 644 So. 2d 983 (Fla. 1994)
Fla. Stat. Ch. 489 establishes licensing procedures and regulatory duties for the construction industry and created the Construction Industry Licensing Board to enforce the performance of these procedures and duties. There is no evidence in the language of the statute or the statutory structure that a private cause of action against a qualifying agent was contemplated by the legislature in enacting this statute. Rather, the language of Fla. Stat. Ch. 489 indicates that it was created merely to secure the safety and welfare of the public by regulating the construction industry. In general, a statute that does not purport to establish civil liability but merely makes provision to secure the safety or welfare of the public as an entity, will not be construed as establishing a civil liability.
Petitioners Murthys (owners) entered into a construction contract with respdondent N. Sinha Corporation (corporation) for construction of improvements and additions to their home. In May 1991, the corporation filed a claim of lien against the owners' home, alleging that the owners owed $ 28,010 on the contract. Thereafter, the owners filed a notice of contest of lien claiming the work on their home was defective and the payments requested were not yet due under the contract. The corporation then filed a complaint for breach of contract and foreclosure of its statutory mechanics' lien. The owners responded by filing an answer containing affirmative defenses, a counterclaim and a third-party complaint. After the trial court partially granted the corporation's motion to strike the answer, the owners filed an amended counterclaim against the corporation and an amended third-party complaint against Niranjan Sinha, the corporation's president, sole stockholder, and qualifying agent. The third-party complaint alleged that Sinha, as the corporation's qualifying agent, was individually liable for the construction defects pursuant to chapter 489, Florida Statutes (1991). The trial court granted Sinha's motion to dismiss the amended third-party complaint. The owners appealed the dismissal of their claims for negligent performance of a contract, discharge of a fraudulent lien, and violation of Florida's minimum building codes. The district court held that the complaint stated a cause of action against Sinha for common-law negligence because the owners alleged both property damage and personal injury. The district court also recognized that Sinha could not be held personally liable in this case because he was not a party to the contract. On appeal, the owners contended that chapter 489 created a cause of action against a qualifying agent who fails to supervise his corporation's construction projects and that the trial court erred in dismissing their claims against Sinha. The owners contend that the Florida statues imposed a duty to supervise on the qualifying agent and that a violation of that duty constituted negligence per se or at least evidence of negligence sufficient to send the cause to a jury.
Did the legislature, when enacting the state laws regulating construction contracting, intend to create a private cause of action against the individual qualifier for a corporation acting as general contractor, thereby allowing owners to recover from a negligent qualifying agent?
The Supreme Court of Florida certified the following question due to its public importance: Does Chapter 489, which governs construction contracting, create a private cause of action against the individual qualifier for a corporation acting as a general contractor? The Court answered the question in the negative.
In order to address the owners' claim, the Court had to first determine whether a cause of action should be judicially implied. The Court found that the legislative history of chapter 489 did not reveal an intent to create a private remedy against a qualifying agent. While chapter 489 provides administrative remedies against a qualifying agent, it does not expressly provide for a civil cause of action against a qualifying agent. Accordingly, the Court rejected the district court's conclusion that a corporation's qualifying agent may be held individually liable for a breach of the duty created by the statutes. The Court held that an owner may recover from a negligent qualifying agent, but only under a common law theory of negligence or through the administrative remedies available pursuant to chapter 489.
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