" 'It is well settled that "[e]xpress or implied contracts entered into by an unlicensed general contractor are null and void because they violate public policy." ' " (quoting White v. Miller, 718 So. 2d 88, 89 (Ala. Civ. App. 1998
How later courts described this case
- " 'It is well settled that "[e]xpress or implied contracts entered into by an unlicensed general contractor are null and void because they violate public policy." ' " (quoting White v. Miller, 718 So. 2d 88, 89 (Ala. Civ. App. 1998
- "[T]his Court has also held that a contract by an unlicensed 'general contractor,' as defined in § 34-8-1, is null and void as a violation of that public policy."
- 'Because Graves was not a licensed contractor at the time that he performed the work for the Dabbses, their oral contract for the construction of the project is unenforceable.'
- "Although the statutes themselves provide a misdemeanor penalty for noncompliance, this Court has gone further, holding express or implied contracts with nonlicensed 'general contractors' to be null and void as a violation of public policy."
Written by the judges who cited it.
The opinion
Rel: June 18, 2026
Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern
Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts,
300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0650), of any typographical or other
errors, in order that corrections may be made before the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2025-2026
_________________________
SC-2025-0774
_________________________
Construction Services, LLC, d/b/a MCA Construction, Inc.
v.
RAM-Robertsdale Subdivision Partners, LLC, Retail Specialists,
LLC, and Rodney Barstein
Appeal from Baldwin Circuit Court
(CV-22-900285)
MENDHEIM, Justice.
SC-2025-0774
Construction Services, LLC, d/b/a MCA Construction, Inc. ("MCA"),
appeals from the Baldwin Circuit Court's summary judgment entered
against it and in favor of RAM-Robertsdale Subdivision Partners, LLC
("RAM"), Retail Specialists, LLC ("Retail Specialists"), and Rodney
Barstein concerning MCA's claims in a dispute involving a residential
subdivision construction project. We reverse the judgment and remand
the case to the circuit court.
I. Facts
Construction Services, LLC ("Construction Services"), is a
Mississippi Corporation. On July 14, 2020, Construction Services
incorporated a new business name, MCA Construction, Inc. On August
18, 2020, Construction Services, through its principal William R. Miller,
filled out and submitted to the State Licensing Board for General
Contractors ("the Board") an application for a general contractor's license
in Alabama. Specifically, Construction Services requested a "Building
Construction" license based on reciprocity, i.e., the fact that Construction
Services had a "Building Construction" license in Mississippi, and based
on the fact that Construction Services previously had been licensed in
Alabama from 2008 through 2012. The application indicated that
2
SC-2025-0774
Construction Services also was licensed in Louisiana and Florida, and it
had been in business since 2002. The application was received by the
Board on August 21, 2020. It is undisputed that Construction Services
and MCA are the same entity. On October 1, 2020, the Board approved
the application and provided MCA a certificate for a general contractor's
license classified for "Building Construction" ("BC"). The license also
stated that MCA had an "Unlimited" bid-limit classification based on
Construction Services' net worth of $815,284.50 and its working capital
of $303,329.50.
RAM is an Alabama limited-liability company, and it is the sole
owner of a parcel of real property known as Amberly Subdivision in
Baldwin County. Retail Specialists is also an Alabama limited-liability
company. MCA alleges that Retail Specialists is the manager and one of
the owners of RAM and that Barstein is the executive vice president and
chief development officer of retail for RAM.
On February 11, 2021, RAM and MCA executed a contract
concerning work MCA would perform on the Amberly Subdivision
property. Specifically, MCA was to perform "all work necessary or
incidental to complete the Amberly Phase I." That work was described by
3
SC-2025-0774
a "Schedule of Values" attached to the contract. The total cost for the
work was $1,076,324.77, and it included clearing the property, building
roadways, providing for drainage, and installing water and sewer piping
for the property.
Before the contract was executed, Jade Consulting, the engineering
firm on the Amberly Subdivision project, submitted a "Land Disturbance
Application" on behalf of MCA to the city engineer for the City of
Robertsdale.1 In reviewing the application for the land-disturbance
permit, the city engineer questioned whether MCA's BC classification on
its general contractor's license was sufficient for the storm-piping and
water-and-sewer-infrastructure work that MCA would be performing.
The city engineer believed that a "Municipal and Utility" ("MU")
classification "may also be needed for the license to perform the work
contemplated at the Amberly Subdivision Phase 1."
1RAM contends that the submissions from MCA about the
land-disturbance permit are not properly before the Court because they
were filed with MCA's original postjudgment motion. However, RAM
never filed a motion to strike those submissions. We note that RAM has
not contested the fact that MCA was granted the permit or the
authenticity of permit submission.
4
SC-2025-0774
Because of that questioning, on January 27, 2021, Miller both called
and emailed Tiffany Loveless, the executive director of the Board, to ask
whether the BC classification on MCA's license was sufficient to perform
the work. Miller expressed the belief that, because MCA was working on
a residential subdivision, the issue may not fall within the Board's
purview and that what the Robertsdale authorities deemed appropriate
would govern. Miller stated that "[t]he long-term solution is to add the
MU category to the existing license, and I already have been approved to
sit for the exam," but he felt that, at the moment, MCA could continue
with the preliminary work at the site. Loveless responded:
"[T]he clearing and grubbing work you wish to undertake is
less than $50,000 and does not fall within the jurisdiction of
this agency. A MU classification or MU subclassification(s) is
required to do the infrastructure for a subdivision, so it would
be best for you to amend your license as soon as possible."
Miller followed up by inquiring as to whether there would be any sort of
problem "if this project were an apartment complex, an office complex, a
shopping center, or a condo"? Loveless responded: "If this was an
apartment complex development, the sitework for the project would fall
under your commercial BC license as the sitework is part of the building
process."
5
SC-2025-0774
On February 9, 2021, the city engineer approved the
land-disturbance permit with the understanding that MCA would obtain
an MU classification for its general contractor's license "prior to
installing storm pipe [and] utilities."
Shortly after execution of the contract, MCA began work on the
Amberly Subdivision project. On March 30, 2021, Jade Consulting
submitted MCA's first payment request for work performed and
materials purchased between February 1 and March 29. That work
included clearing and grubbing, asphalt paving for roads, and providing
numerous supplies in preparation for further work. The total for the first
payment request was $177,424.79. RAM paid several of MCA's initial
payment requests.
On April 30, 2021, Miller passed the examination for obtaining an
MU classification. On May 5, 2021, Miller filed with the Board an
application to amend the classification of MCA's license to add an MU
classification. On May 12, 2021, the Board approved Miller's
"classification amendment request" and provided him a certificate of
license showing that MCA now possessed both a BC classification and an
MU classification on its existing Alabama general contractor's license.
6
SC-2025-0774
The materials for underground construction started to arrive shortly
thereafter. RAM continued to pay MCA for work performed on invoices
submitted thereafter.
For reasons that are not entirely clear from the record or the
submissions of the parties, the relationship between RAM and MCA
broke down, causing MCA to stop working on the Amberly Subdivision
project. On February 11, 2022, MCA recorded a statement of lien on the
Amberly Subdivision property in the amount of $646,375.63 because,
MCA alleged, RAM had failed to pay MCA for goods and services provided
for the project.
On March 23, 2022, RAM commenced in the Baldwin Circuit Court
an action against MCA, Miller, and Caroline Miller. RAM alleged that
MCA had performed "defective work on Phase 1 of the Amberly
Subdivision" project and that MCA had failed to "pay subcontractors and
suppliers who provided goods and/or services at the Amberly
Subdivision." RAM asserted several claims against MCA, including
breach of statutory duties, breach of contract, negligence, negligent
misrepresentation, and accounting.
7
SC-2025-0774
On June 22, 2022, MCA filed an answer to RAM's complaint, and it
asserted counterclaims against RAM as well as third-party claims
against Retail Specialists and Barstein.2 MCA asserted claims of breach
of contract and fraud against RAM. Among other things, MCA alleged
that it had not been paid for some of the work included in the contract
and that it was forced to perform work outside the contract that did not
come with an increase in the contract price. MCA also alleged that some
of the delay in the project construction had been due to RAM's ordering
MCA to prioritize its work on a different subdivision project in Cullman
County for RAM's sister corporation, RAM-Ellsworth Subdivision
Partners, LLC. On July 22, 2022, RAM, Retail Specialists, and Barstein
filed their answer to MCA's counterclaims and third-party claims.
2As the Court observed in the previous appeal in this case:
"MCA styled all of its claims as 'counterclaims' and
referred to those parties it brought claims against as
'counterclaim defendants.' The circuit court and the other
parties followed this nomenclature, even though Retail
Specialists and Barstein were 'not [parties] to the action'
before MCA filed its answer and counterclaim. Retail
Specialists and Barstein are therefore properly viewed as
third-party defendants. See Rule 14, Ala. R. Civ. P."
Construction Servs., LLC v. RAM-Robertsdale Subdivision Partners,
LLC, 395 So. 3d 468, 469 n.1 (Ala. 2024).
8
SC-2025-0774
On September 22, 2022, RAM, Retail Specialists, and Barstein ("the
RAM parties") filed a summary-judgment motion concerning MCA's
claims against them. In their motion, the RAM parties argued that MCA
could not recover on any of its claims because, they asserted, MCA was
an "unlicensed" general contractor at the time it executed the contract on
February 11, 2021. The RAM parties asserted that, because MCA did not
have an MU classification for its general contractor's license at the time
the contract was executed, MCA was not properly licensed for the work
it was performing. As a result, according to the RAM parties, MCA's
contract with RAM was void. Because all of MCA's claims against the
RAM parties were predicated on MCA's contract with RAM, the RAM
parties contended that they were entitled to a summary judgment as to
all of those claims.
On October 10, 2022, MCA filed a response in opposition to the
RAM parties' summary-judgment motion. MCA argued that it clearly
was not an unlicensed general contractor at the time it executed the
contract because it possessed a BC-classification general contractor's
license on February 11, 2021. MCA further contended that it had not
performed over $50,000 of utilities work on the Amberly Subdivision
9
SC-2025-0774
project before it obtained the MU classification on its general contractor's
license. MCA added that there had been a genuine question as to whether
MCA even needed an MU classification to perform all the work for Phase
1 of the Amberly Subdivision project, that MCA had followed the advice
of government authorities on the subject, that MCA had kept RAM
informed about the issue, and that RAM had continued to pay MCA for
the work performed after MCA had obtained the MU classification for its
license.
On November 1, 2022, the circuit court entered a summary
judgment in favor of RAM with respect to all the claims asserted by MCA
against it. On November 10, 2022, the circuit court entered an amended
summary judgment in favor of all the RAM parties with respect to the
claims MCA had asserted against them.
On November 23, 2022, MCA filed a postjudgment motion to alter,
amend, or vacate the circuit court's summary judgment. For the most
part, MCA reiterated its previous arguments concerning why it believed
the contract between RAM and MCA was not void as a result of MCA's
not possessing an MU classification on its general contractor's license at
the time the contract was executed. However, MCA also attached new
10
SC-2025-0774
submissions to the motion that included an affidavit from the
Robertsdale city engineer and the land-disturbance permit issued by the
Robertsdale city engineer.
On January 4, 2023, the RAM parties filed a response in opposition
to MCA's postjudgment motion. The RAM parties argued that MCA's
additional evidence was not "new evidence" because it could have been
presented in its response to the summary-judgment motion. On January
9, 2023, MCA filed a reply to the RAM parties' response in opposition to
the postjudgment motion. In its reply, MCA contended that the RAM
parties had "comingle[d] the issue of an unlicensed contractor with a
license classification question." On January 10, 2023, the circuit court
entered an order denying MCA's postjudgment motion.
On February 17, 2023, MCA filed a motion seeking to have the
circuit court's summary judgment entered as a final judgment pursuant
to Rule 54(b), Ala. R. Civ. P., so that MCA could file an immediate appeal.
Following a hearing, on April 25, 2023, the circuit court entered a
"Consent Order" in which it granted MCA's motion to certify as a final
judgment the summary judgment entered in favor of the RAM parties as
to MCA's claims against them. That order noted that the parties had
11
SC-2025-0774
"agreed on the form of this order" and stated that "[t]his matter presents
an 'exceptional' matter that warrants entry of a final judgment pursuant
to Rule 54(b)." The order further stated that "[t]he summary judgment
order is based on this Court's legal determination on licensure, not a
factual dispute between the parties that may be discoverable moving
forward towards trial." The order further observed:
"In making the legal determination on [the RAM
parties'] motion for summary judgment, the Court relied on
[the RAM parties'] argument that a line of Alabama caselaw
recogniz[es] that contracts 'entered into by an unlicensed
general contractor are null and void because they violated
public policy.' White v. Miller, 718 So. 2d 88, 89 (Ala. Civ. App.
1998); see also Hawkins v. League, 398 So. 2d 232, 235 (Ala.
1981). Notwithstanding this precedent, MCA argued that the
Alabama Supreme Court recognized an important exception
to this rule that would be applicable to MCA's counterclaims
in McNairy v. Sugar Creek Resort, Inc., 576 So. 2d 185 (Ala.
1991). In McNairy, the Alabama Supreme Court recognized
that an unlicensed general contractor who receives a license
after contractual engagement and begins work may recover
on the contract if the contract is ratified by the parties after
the contractor receives a proper license."
On June 6, 2023, MCA appealed the circuit court's summary
judgment. Despite the circuit court's lengthy explanation as to why its
judgment was appropriate for certification as a final judgment under
Rule 54(b), on January 12, 2024, this Court concluded in an opinion that
"the claims pending below and those on appeal have significant 'factual
12
SC-2025-0774
overlap,' " and that, therefore, "the circuit court's summary judgment was
improperly certified as final." Construction Servs., LLC v. RAM-
Robertsdale Subdivision Partners, LLC, 395 So. 3d 468, 471 (Ala. 2024)
(quoting Clarke-Mobile Cntys. Gas Dist. v. Prior Energy Corp., 834 So.
2d 88, 95 (Ala. 2002)). Consequently, we dismissed the appeal for lack of
jurisdiction.
On May 20, 2025, RAM3 filed a motion to dismiss its claims against
MCA and the Millers without prejudice to "resolve all pending claims,
produce a final judgment, and allow the Alabama Supreme Court to
decide a pivotal question on appeal: Does McNairy v. Sugar Creek
Resorts remain good law? That answer will shape this case and a related
federal suit, saving time and resources for everyone."4
3No explanation as to why is provided in the record, but, after we
issued our opinion, Retail Specialists and Barstein were no longer listed
as parties in this action.
4The "related federal suit" to which RAM referred is RAM-
Ellsworth Subdivision Partners, LLC v. Construction Services, LLC, No.
5:22-cv-00779-MHH, Mar. 13, 2024 (N.D. Ala. 2024) (not reported in
Federal Supplement), that has been adjudicated in the federal District
Court for the Northern District of Alabama. We will discuss that case in
more detail in Part III of this opinion.
13
SC-2025-0774
On May 28, 2025, the circuit court entered an order granting RAM's
motion to dismiss its claims against MCA and the Millers, without
prejudice. That order stated that the dismissal of RAM's claims
"eliminates all remaining claims in this case" and "resolves every pending
claim" and, thus, that "[n]o issues remain for adjudication." The order
added:
"This case questions the ongoing validity of McNairy v.
Sugar Creek Resorts, [576 So. 2d 185, 187 (Ala. 1991),] a 35-
year-old decision at odds with Cooper v. Johnston, [283 Ala.
565, 219 So. 2d 392 (1969),] which represents the majority
rule in unlicensed contractor law. The split affects this case
and a related federal action between the parties on a Cullman
County project. The Alabama Supreme Court's guidance will
resolve this conflict and clarify the law."
On June 27, 2025, MCA filed a second motion to alter, amend, or
vacate the judgment. In that motion, MCA argued that RAM should be
estopped from contending that MCA's license was insufficient because,
MCA asserted, RAM was aware of the classification issue the entire time
it dealt with MCA. MCA also repeated its other arguments concerning
having a valid general contractor's license.
On August 22, 2025, RAM filed a response in opposition to MCA's
second postjudgment motion. RAM contended that MCA's motion should
14
SC-2025-0774
fail because it was improperly successive and because it presented no
newly discovered evidence.
On August 25, 2025, the circuit court denied MCA's second
postjudgment motion. MCA filed a timely appeal.
II. Standard of Review
"This Court's review of a summary judgment is de novo.
Williams v. State Farm Mut. Auto. Ins. Co., 886 So. 2d 72, 74
(Ala. 2003). We apply the same standard of review as the trial
court applied. Specifically, we must determine whether the
movant has made a prima facie showing that no genuine issue
of material fact exists and that the movant is entitled to a
judgment as a matter of law. Rule 56(c), Ala. R. Civ. P.; Blue
Cross & Blue Shield of Alabama v. Hodurski, 899 So. 2d 949,
952-53 (Ala. 2004). In making such a determination, we must
review the evidence in the light most favorable to the
nonmovant. Wilson v. Brown, 496 So. 2d 756, 758 (Ala. 1986).
Once the movant makes a prima facie showing that there is
no genuine issue of material fact, the burden then shifts to the
nonmovant to produce 'substantial evidence' as to the
existence of a genuine issue of material fact. Bass v.
SouthTrust Bank of Baldwin County, 538 So. 2d 794, 797-98
(Ala. 1989); Ala. Code 1975, § 12-21-12."
Dow v. Alabama Democratic Party, 897 So. 2d 1035, 1038-39 (Ala. 2004).
III. Analysis
As the rendition of facts indicates, a determination whether the
circuit court erred in entering a summary judgment in the RAM parties'
favor turns on the answer to a single question: was MCA an unlicensed
15
SC-2025-0774
general contractor when it executed the Amberly Subdivision Phase I
construction contract with RAM on February 11, 2021? The parties arrive
at different answers to that question because they have different views
of what constitutes an "unlicensed" general contractor. Answering the
question requires providing legal background of the statutory licensing
scheme for general contractors and the regulations that have been
promulgated in support of that scheme, as well as some of the cases this
Court has decided in this area of the law.
We begin with the law concerning the licensing of general
contractors in Alabama, which is provided in the Alabama General
Contractor's Practice Act ("the AGCPA"), § 34-8-1 et seq., Ala. Code 1975.
At the time MCA and RAM executed the contract at issue, former § 34-8-
1(a), Ala. Code 1975, defined the term "general contractor" as:
"(a) For the purpose of [the AGCPA], a 'general
contractor' is defined to be one who, for a fixed price,
commission, fee, or wage undertakes to construct or
superintend or engage in the construction, alteration,
maintenance, repair, rehabilitation, remediation,
reclamation, or demolition of any building, highway, sewer,
structure, site work, grading, paving or project or any
improvement in the State of Alabama where the cost of the
undertaking is fifty thousand dollars ($50,000) or more,[5]
5Effective October 1, 2024, § 34-8-1(a), Ala. Code 1975, provides
that, as a threshold, "the cost of the undertaking is one hundred thousand
16
SC-2025-0774
[and] shall be deemed and held to have engaged in the
business of general contracting in the State of Alabama."
Under the definition of a "general contractor" in former § 34-8-1,
MCA clearly was acting as a general contractor in undertaking the work
described in the Amberly Subdivision contract because its performance
under the contract included site work, grading, paving, and building
water sewer structures, and the total cost for the work exceeded $50,000.
Neither party disputes that MCA was acting as a "general contractor"
according to former § 34-8-1.
Section 34-8-2(a), Ala. Code 1975, provides that becoming "licensed
... as a general contractor in this state" requires "fil[ing] with the board
... a written application on a form as prescribed for examination by the
board ...." That section further states:
"The applicant shall apply for a license covering the type or
types of contracts on which he or she wishes to perform, and
shall provide proof of liability insurance. The board shall
classify contractors according to the type or types of contracts
on which they may perform, within maximum bid limits ....
An applicant shall not be so classified as to permit him or her
to bid on or to perform a type of work not included in his or
her request for a license. If the application is satisfactory to
the board, then the applicant may be required to take an
dollars ($100,000) or more." Act No. 2024-277, § 1, Ala. Acts 2024. The
higher threshold was not the law at the time MCA and RAM executed
the contract at issue.
17
SC-2025-0774
examination to determine his or her qualifications. If the
result of the examination of the applicant is satisfactory to the
board, the board shall then issue to the applicant a certificate
to engage in general contracting in the State of Alabama,
stipulating in each license issued the type or types of work the
contractor is permitted to bid on or to perform under his or
her license and also setting out a letter symbol indicating the
maximum limits on which he or she is permitted to bid or to
perform in a single contract."
(Emphasis added.) Section 34-8-2(a) goes on to describe "classifications"
based on bid limits:
"The following letter symbols indicate the maximum amount
bid limits allowed a licensee on any one single contract
undertaking:
"A--Not to exceed $100,000.00
"B--Not to exceed [$]250,000.00
"C--Not to exceed [$]500,000.00
"D--Not to exceed [$]1,000,000.00
"E--Not to exceed [$]3,000,000.00
"U--Unlimited"
However, in the regulations it has promulgated, the Board has
expounded upon § 34-8-2(a)'s statement that "[t]he board shall classify
contractors according to the type or types of contracts on which they may
18
SC-2025-0774
perform" beyond the bid-limit classifications. Specifically, Rule
230-X-1-.27, Ala. Admin. Code, provides, in part:
"(1) All applicants must request classification(s) of their
licenses within the following MAJOR CLASSIFICATIONS.
(Applicants must provide a minimum of three projects
completed for each sub-classification listed in order to qualify
for that Major Classification. Applicants not qualifying for a
Major Classification should request specific
Sub-Classification(s) and/or Specialty Classifications for
which their work experience will meet the minimum
experience requirement.)"
(Capitalization in original.) Rule 230-X-1-.27 lists six "major
classifications" of work for general contractors: Building Construction,
Building Construction under Four Stories, Highways and Streets,
Municipal and Utility, Heavy and Railroad Construction, and Specialty
Construction. Rule 230-X-1-.27 also provides definitions for the major
classifications and subclassifications/specialty classifications listed in
that regulation. Relevant to this case are the major classifications of
Building Construction and Municipal and Utility, as well as some of their
subclassifications.
"(2) (BC) Building Construction: Shall include the
construction of building structures, including modifications
thereof or additions thereto, intended for use for shelter,
protection, comfort or convenience. Building construction
shall include the excavation and foundations for buildings and
work incidental thereto.
19
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"(a) (BC-S) Specialty Construction: Any
of the following special skills and/or trades or
crafts may be requested in lieu of the major
classification of Building Construction.
"1. SITEWORK
"Earthwork
"Fencing
"Other
"2. CONCRETE
"Foundations
"Structural Concrete Erection
"Reinforcing Steel
"Precast and Prestressed Concrete
Installation
"Other
"....
"....
"(5) (MU) Municipal and Utility: Shall include
clearing, grubbing, grading, paving, curbs, gutters, walks,
alleys, driveways, sewer projects, water projects, gas projects,
electric projects, telephone projects, and work incidental
thereto.
20
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"(a) MU-(S) Specialty Construction: Any
of the following specialties may be requested in
lieu of the major classification of Municipal and
Utility:
"1. Sewer Projects
"2. Water Projects
"3. Gas and Oil Projects
"4. Power Projects and Plants
"5. Telecommunication Projects
"6. Clearing and Grubbing
"7. Site Work Grading
"8. Drainage and Culvert
"9. Paving and Asphalt
"10. Concrete
"11. Pipelines
"12. Gunite
"13. Facilities
"14. Other"
Rule 230-X-1-.27 (bold typeface and capitalization in original).
As we explained in the rendition of the facts, MCA applied for a
general contractor's license in August 2020, requesting a BC
21
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classification, and on October 1, 2020, the Board granted MCA a BC
license with an "Unlimited" bid-limit classification. On May 12, 2021, the
Board granted MCA's "classification amendment request" to add an MU
classification to its existing general contractor's license. Rule 230-X-1-
.34(10), Ala. Admin. Code, describes such a change as a "license
amendment." Similarly, Rule 230-X-1-.43, Ala. Admin. Code, which
explains "[t]he fees for the administrative services," provides:
"3. To change and add classifications of type of work to
license, the first change will be seventy-five dollars ($75) and
each change in classification thereafter will be fifty dollars
($50) per amendment request."
(Emphasis added.) Thus, the regulations are clear that adding
classifications does not require the issuance of a new license or the
payment of the higher fees associated with new licenses.
Returning to the AGCPA, § 34-8-5, Ala. Code 1975, provides:
"The issuance of a certificate by the board shall be
evidence that the person, firm, or corporation named therein
is entitled to all the rights and privileges of a licensed general
contractor to perform work of the types and amounts specified
in the license issued to him, her, or it while the license
remains unrevoked or unexpired."
(Emphasis added.) Such evidence is important because § 34-8-6(a), Ala.
Code, 1975, provides a criminal penalty for performing the work of a
22
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general contractor without a license and for certain persons or businesses
that accept general-contractor work from "anyone not properly licensed."
"(a) Any person, firm, or corporation not being duly
authorized who shall engage in the business of general
contracting in this state, except as provided for in [the
AGCPA], and any person, firm, or corporation presenting or
attempting to file as its own the license certificate of another,
or who shall give false or forged evidence of any kind to the
board, or to any member thereof, in obtaining a certificate of
license, or who falsely shall impersonate another, or who shall
use an expired or revoked certificate of license shall be
deemed guilty of a Class A misdemeanor and for each offense
for which he or she is convicted shall be punished as provided
by law. Furthermore, any person including an owner,
architect, engineer, construction manager, or private
awarding authority who considers a bid from anyone not
properly licensed under [the AGCPA] shall be deemed guilty
of a Class B misdemeanor and shall for each offense of which
he or she is convicted be punished as provided by law.
"....
"(d) The submission of the contractor's current license
number before considering the bid shall be sufficient evidence
to relieve the owner, architect, engineer, construction
manager, or awarding authority of any liability under [the
AGCPA]."
§ 34-8-6 (emphasis added).
Likewise, § 34-8-9, Ala. Code 1975, provides that "[a]ny person,
firm, or corporation, upon making application to the building inspector
or such other authority of any incorporated city, town, village, or county
23
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in Alabama charged with the duty of issuing building or other permits
for" general-contractor work "shall, before he or she shall be entitled to
the issuance of permits, furnish satisfactory proof to the inspector or
authority that he or she is duly licensed under [the AGCPA]." That
section also provides a criminal penalty for any
"building inspector or other authority to issue or allow the
issuance of the building permit unless and until the applicant
has furnished evidence that he or she is either exempt from
[the AGCPA] or is duly licensed under [the AGCPA] to carry
out or superintend the work for which the permit has been
applied."
Id.
Section 34-8-9 is undoubtedly why Robertsdale's city engineer
questioned whether MCA's BC classification was sufficient for MCA to be
authorized to perform utility work on the Amberly Subdivision project.
That questioning led to Miller's discussions with the Board's executive
director, Loveless, concerning what work MCA could perform with its BC
classification. Loveless told Miller that MCA could perform all the
"clearing and grubbing work" with its BC license, but that the
underground utility work would require Miller "to amend your license"
to have an MU classification.
24
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The circuit court entered a summary judgment in favor of the RAM
parties because MCA's claims against them were based on the Amberly
Subdivision contract. The circuit court essentially held that MCA's
contract with RAM was "null and void" because the circuit court
determined MCA to be "an unlicensed general contractor" at the time it
executed the contract.
The power to declare void a contract executed by an unlicensed
general contractor is derived from a gloss this Court has placed the
criminal penalty imposed by § 34-8-6 for performing the work of a general
contractor without a license.
"Although § 34-8-6 imposes a misdemeanor penalty for
engaging in the acts prohibited therein, this Court has gone
further, holding express or implied contracts with unlicensed
'general contractors' to be unenforceable as a violation of
public policy. Hawkins v. League, 398 So. 2d 232 (Ala. 1981);
Cooper v. Johnston, 283 Ala. 565, 219 So. 2d 392 (1969). Such
contracts are illegal and unenforceable by the unlicensed
'general contractor.' Twickenham Station, Inc. v.
Beddingfield, 404 So. 2d 43 (Ala. 1981); Hawkins v. League,
supra; Tucker v. Walker, 293 Ala. 589, 308 So. 2d 245 (1975);
see also Herbert v. Birmingham-Jefferson Civic Center
Authority, 694 F.2d 240 (11th Cir. 1982). See generally,
Annot., Failure of Building or Construction Artisan to Procure
Business or Occupational License as Affecting Enforceability
of Contract or Right of Recovery for Work Done, 44 A.L.R.4th
271 (1986). In order to ensure that the regulatory objectives
of the licensing statute are met, this Court has held
unenforceable contracts based on 'creative schemes' designed
25
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to circumvent its requirements. J & M Indus., Inc. v. Huguley
Oil Co., 546 So. 2d 367 (Ala. 1989); Cooper v. Johnston, supra."
Med Plus Props. v. Colcock Constr. Grp., Inc., 628 So. 2d 370, 374 (Ala.
1993) (emphasis added). See, e.g., Architectural Graphics & Constr.
Servs., Inc. v. Pitman, 417 So. 2d 574, 576 (Ala. 1982) ("[T]his Court has
also held that a contract by an unlicensed 'general contractor,' as defined
in § 34-8-1, is null and void as a violation of that public policy."); Hawkins
v. League, 398 So. 2d 232, 235 (Ala. 1981) ("Although the statutes
themselves provide a misdemeanor penalty for noncompliance, this Court
has gone further, holding express or implied contracts with nonlicensed
'general contractors' to be null and void as a violation of public policy.");
Triple D Trucking, Inc. v. American Petroleum Equip. & Constr., Inc.,
865 So. 2d 1234, 1237 (Ala. Civ. App. 2003) (" 'It is well settled that
"[e]xpress or implied contracts entered into by an unlicensed general
contractor are null and void because they violate public policy." ' "
(quoting White v. Miller, 718 So. 2d 88, 89 (Ala. Civ. App. 1998), quoting
in turn Goodwin v. Morris, 428 So. 2d 78, 79 (Ala. Civ. App. 1983)).
The Court previously has described the public policy that it believes
to be behind the AGCPA:
26
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"We are convinced from a review of the original and
amendatory acts that it was the intention of the legislature
that said acts be enacted for regulation and protection as
distinguished from a law created solely for revenue purposes.
The primary purpose was to protect the public against
incompetent contractors for certain-type structures, and also
to better assure properly constructed structures which were
free from defects and dangers to the public."
Cooper v. Johnston, 283 Ala. 565, 567, 219 So. 2d 392, 394 (1969).
The Court has emphasized the importance of that public policy in
several rulings that have broadly applied the scope of the power to
declare contracts void.
"In affirming the judgment below, we find it appropriate
to point out that we also reaffirm this Court's commitment to
the purpose and intent of the provisions of [the AGCPA]. The
importance of the regulatory nature of the statute, and the
protection it affords the citizens of Alabama, [cannot] be
avoided by unlicensed contractors who, through creative
schemes, seek to circumvent the requirements of [the
AGCPA]. See, for example, Cochran v. Ozark Country Club,
Inc., 339 So. 2d 1023 (Ala. 1976). Similarly, an unlicensed
contractor will not be afforded the privileges that come from
the statute because of its association with a licensed
contractor (see Cooper v. Johnston, [283 Ala. 565, 219 So. 2d
392 (1969)]); because of its obtaining a license subsequent to
the execution of the contract (see Architectural Graphics &
Construction v. Pitman, 417 So. 2d 574 (Ala. 1982)); or
because of the equally inequitable conduct of the other
contracting party (see Cochran v. Ozark Country Club, Inc.,
supra). While the result in the instant case may seem harsh,
'[n]evertheless, the statute that we are dealing with is a penal
one, and harsh results sometimes flow from the construction
27
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of a penal statute.' Hawkins v. League, 398 So. 2d [232,] 237
[(Ala. 1981)]."
J & M Indus., Inc. v. Huguley Oil Co., 546 So. 2d 367, 371 (Ala. 1989).
RAM argues that the circuit court's ruling is in line with the
foregoing cases because it is undisputed that MCA did not possess an MU
classification on its general contractor's license at the time it executed
the contract on February 11, 2021; instead, MCA held a BC classification
on its license. The fact that the Board subsequently granted MCA's
application to amend its license on May 12, 2021, so that the license
included an MU classification along with the BC classification is
irrelevant, RAM contends, because, in cases such as Architectural
Graphics, this Court held that obtaining a general contractor's license
after execution of the contract does not cure the defect. RAM further
insists that it is irrelevant whether RAM was aware that MCA only held
a BC license at the time the parties executed the contract because our
courts have held that an in pari delicto argument is not a valid basis for
overcoming the estoppel defense of a void contract. See KLW Enters., Inc.
v. West Alabama Com. Indus., Inc., 31 So. 3d 136, 140 (Ala. Civ. App.
2009). But see Architectural Graphics, 417 So. 2d at 576-77 (stating that
an unlicensed general contractor's argument that the parties with whom
28
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it contracted "should be estopped to raise this defense" that the contract
is void because "the parties were in pari delicto" has "some appeal," but
concluding that the Court "cannot address [that argument] because the
record is devoid of any evidence whatsoever to either support or
contradict [the unlicensed contractor's] contention").
MCA argues that the circuit court's decision is erroneous because
all the cases that have declared contracts of general contractors void have
involved situations in which the general contractor had no general
contractor's license of any kind at the time the contracts were executed.
MCA contends: "[T]here is no basis in Alabama law to deem the contract
of a licensed contractor void due to an alleged missing classification."
MCA's brief, p. 19. MCA further argues that, to the extent that its failure
to have an MU classification on its license at the time the contract was
executed raises an issue, Miller sought to address the issue even before
the execution of the contract by contacting the executive director of the
Board. MCA states that this demonstrates that MCA was not attempting
"through creative schemes[ ] … to circumvent the requirements of [the
AGCPA]." J & M Industries, 546 So. 2d at 371. MCA also notes that the
Robertsdale city engineer issued a permit that allowed MCA to work on
29
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the Amberly Subdivision project -- pursuant to § 34-8-9 -- before MCA
had amended its license to include the MU classification. Finally, MCA
asserts that it obtained the amendment to its license that contained the
MU classification before MCA performed any utility work on the Amberly
Subdivision project. MCA argues that its acquisition of the MU
classification means that, at the least, it substantially complied with the
AGCPA, which this Court held was sufficient in McNairy v. Sugar Creek
Resort, Inc., 576 So. 2d 185 (Ala. 1991).
Rather than relying on cases, RAM contends that language in the
AGCPA and the regulations the Board has promulgated in conjunction
with it support RAM's position. For example, RAM highlights sections of
the AGCPA that at least imply that work classifications are part of the
licensing scheme. Section 34-8-2(a) provides that, when the Board
approves an applicant for a license, "the board shall then issue to the
applicant a certificate to engage in general contracting in the State of
Alabama, stipulating in each license issued the type or types of work the
contractor is permitted to bid on or to perform under his or her license
...." (Emphasis added.) Section 34-8-5 states that "[t]he issuance of a
certificate by the board shall be evidence" that the recipient of the
30
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certificate possesses "all the rights and privileges of a licensed general
contractor to perform the work of the types and amounts specified in the
license issued ...." (Emphasis added.)
But the fact that licenses are supposed to designate the types of
work that a licensee has applied to perform does not demonstrate that
the most severe sanction this Court applies pursuant to the AGCPA must
fall on general contractors who have obtained a license and end up
performing work not listed in the regulations as part of the license's
classification. Indeed, the clear emphasis for classifications in § 34-8-2(a)
is on bidding amounts; the classifications for types of work are
subsidiary, as those details are listed in the regulations promulgated in
support of the AGCPA.
Moreover, examination of the regulations reveals that there are not
clean breaks between the different classifications, especially with respect
to the BC classification. As MCA puts it: "RAM claims that the various
classifications do not overlap, but a review of the sub-specialties shows
distinct overlaps." MCA's reply brief, p. 19. Rule 230-X-1-.27(5)(a) states
that MU specialties include, among other things, clearing and grubbing,
sitework grading, paving and asphalt work, concrete work, and "other"
31
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things. Rule 230-X-1-.27(2)(a) states that BC specialties include, among
other things, sitework, concrete work, earthwork, and "other" things. The
overlaps between types of work are why MCA is accurate in stating that
"MCA's license allowed it to perform most of the Amberly work." MCA's
reply brief, p. 19. The only types of work expressly listed in Rule
230-X-1-.27(5)(a) that are not listed in Rule 230-X-1-.27(2)(a), and which
MCA eventually performed, are "sewer projects" and "water projects."
MCA reluctantly admits that "the underground utilities[ ] ... may require
the additional MU classification," but it argues that it "added the MU
classification to its existing license prior to installing the underground
utilities." MCA's reply brief, p. 19.
But whether MCA needed the MU classification on its license when
it had a BC classification is genuinely unclear under the regulations. In
fact, Rule 230-X-1-.26, Ala. Admin. Code, provides:
"(1) Any project in the State of Alabama for construction,
erection, modification, alteration, or addition of or to any
building, highway, sewer, grading or any improvement or
structure where the cost of the undertaking is $50,000 or more
($5,000.00 or more in the case of swimming pools) must be
constructed by a contractor licensed by the Board. A general
contractor may undertake to construct or superintend the
construction of any project if 51% or more of the work as
measured by the cost (labor, materials, tools, construction
equipment cost and installed equipment) falls within the
32
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major classification, subclassification or specific
subclassification in which the contractor is licensed. On any
project where no major classification, subclassification or
specific subclassification constitutes 51% or more of the work
as measured by the cost (labor, materials, tools, construction
equipment cost and installed equipment), the contractor may
undertake to construct or superintend the construction of
such project if the contractor is licensed in the major
classification, subclassification or specific subclassification
which constitutes the greatest part of the work on the project
as measured by the cost (labor, materials, tools, construction
equipment cost and installed equipment).
"(2) Notwithstanding the foregoing subsection,
contractors holding licenses with Building Construction (BC)
appearing thereon may undertake to construct or superintend
the construction of any project even if 51% or more of the work
as measured by the cost (labor, materials, tools, construction
equipment cost and installed equipment) falls outside the
major classification of Building Construction (BC) so long as
such work is required to make the building usable for its
intended purpose."
(Emphasis added.)
The fact that the BC classification is the most comprehensive
classification for a general contractor under the regulations is precisely
why Miller tried to get clarification from the Board's executive director
about whether MCA needed to add an MU classification to its license,
and it is also why the Robertsdale city engineer approved MCA's
land-disturbance permit before MCA had obtained an MU classification
on its license. Both MCA and the city engineer were seeking to follow the
33
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regulations. RAM is insisting that, despite MCA's good faith, MCA's
failure to add the MU classification before it entered into the contract
voided the entire transaction.
RAM focuses on the statement in § 34-8-6(a) that
"[a]ny person, firm, or corporation not being duly authorized
who shall engage in the business of general contracting in this
state, except as provided for in [the AGCPA], ... shall be
deemed guilty of a Class A misdemeanor and for each offense
for which he or she is convicted shall be punished as provided
by law."
(Emphasis added.) RAM argues that "duly authorized" means possessing
a correctly classified license. RAM posits that if "any license from the
Board satisfies the statute, no matter how unrelated to the work at
hand," the word "duly" would be "mere surplusage" and "the distinction
between BC and MU that the regulation plainly draws" would be
meaningless. RAM's brief, p. 26.
But that reading places inordinate emphasis on the word "duly,"
especially given that the same wording was used in the original act of
1935 that created the Board and the licensing requirement. See Ala. Acts
1935, Act No. 297, § 12 ("Any person, firm or corporation not being duly
authorized who shall engage in the business of general contracting in this
State, except as provided in this Act, ... shall be deemed guilty of a
34
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misdemeanor ...."). At that time, there were no regulations distinguishing
major classifications for the types of work performed. Even though
general-contractor licensing has become more specialized in the
intervening years, the focus of the criminal sanctions specified in § 34-8-
6(a), as with its Code predecessors, remains those "who shall engage in
the business of general contracting in this state"; it does not mention
classifications or the "types of work" at all. That language dovetails with
the definition of a "general contractor" provided in § 34-8-1(a) that lists
all types of work undertaken by general contractors along with the
threshold amount required to qualify as general-contracting work.
Section 34-8-1's definition is what this Court previously has discussed in
determinations about whether a contract involving general-contracting
work was void. See, e.g., MSE Bldg. Co. v. Stewart/Perry Co., 392 So. 3d
478, 484 (Ala. 2023); Hawkins, 398 So. 2d at 235; Architectural Graphics,
417 So. 2d at 576.
Beyond RAM's strained reading of § 34-8-6(a), there is the fact that
MCA is correct in its observation that no Alabama case has determined
that a wrong or mistaken classification on a general contractor's license
renders a contract involving that general contractor void. Indeed, RAM
35
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admits that no Alabama cases expressly support its position: "Research
reveals no prior Alabama case where this Court addresses 'mis-licensure'
versus non-licensure." RAM's brief, p. 31 n.4. Nonetheless, RAM insists
that "mis-licensure" is equivalent to "non-licensure." "Otherwise," it
insists, "the [AGCPA] and decades of jurisprudence would be turned on
its head. Clearly the construction industry requires even more regulation
now to protect against contractors who are not 'duly authorized' to
perform work than when the Act was passed in 1935." Id.
Even though there are no Alabama state-court cases addressing
this subject, as the circuit court alluded to in its May 28, 2025, order,
there is an Alabama federal-district-court case that has done so: RAM-
Ellsworth Subdivision Partners, LLC v. Construction Services, LLC, No.
5:22-cv-00779-MHH, Mar. 13, 2024 (N.D. Ala. 2024) (not reported in
Federal Supplement). The facts in RAM-Ellsworth are strikingly similar
to those in this case.
"This action concerns a dispute over work defendant
Construction Services LLC, d/b/a MCA Construction, Inc.
performed in a housing subdivision in Cullman County,
Alabama. Plaintiff RAM-Ellsworth Subdivision Partners,
LLC, owned and developed the subdivision. Nearly one year
into the project, RAM[-Ellsworth] and MCA had a falling out,
and MCA filed a lien against the property for $1,771,933.29.
36
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RAM[-Ellsworth] then sued MCA, and MCA asserted
counterclaims against RAM[-Ellsworth]."
Id. Specifically, "sometime before July 2020, RAM[-Ellsworth] ...
contracted with Meredith Environmental, Inc. for infrastructure and
sitework for phase 1 of the Ellsworth Subdivision project in Cullman,
Alabama." Id. However, after work began, Miller decided to leave
Meredith Environmental, but he agreed to keep working on the Ellsworth
Subdivision project under his own company name, MCA.6 "Between July
2020 and August 2020, MCA submitted three invoices for 'Ellsworth
Phase 1 Grading and site prep' totaling $288,852. RAM[-Ellsworth] paid
the three invoices. ... When MCA submitted these invoices, neither MCA
nor Mr. Miller had an active Alabama general contractor's license." Id.
As we know from the facts in the present case, "[o]n October 1, 2020, the
Licensing Board issued a general contractor's license to MCA under the
name 'Construction Services LLC' with a 'building construction'
6The federal district court noted that the parties disagreed as to
when Meredith Environmental and Miller split up: RAM-Ellsworth
contended that the spit occurred on July 16, 2020, but Miller contended
that it occurred in January 2021, after MCA had obtained its Alabama
general contractor's license. The federal district court did not believe that
factual dispute mattered for resolving the issue whether the contract
should be declared void under Alabama public policy. See RAM-
Ellsworth, at n.3.
37
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certification." Id. MCA continued to work on the Ellsworth Subdivision
project, MCA submitted invoices to RAM-Ellsworth for MCA's work, and
RAM-Ellsworth paid those invoices. "On May 12, 2021, MCA added a
'municipal and utilities' classification to its contractor's license." Id.
RAM-Ellsworth paid invoices from MCA for work performed after that
date. RAM-Ellsworth and MCA had a falling out sometime later, and
MCA filed a lien in the amount of $1,771,933.29 on the Ellsworth
Subdivision property. In March 2022, RAM-Ellsworth commenced an
action against MCA and Miller, and MCA counterclaimed, alleging
breach of contract and seeking enforcement of its lien. Miller removed the
case to the federal District Court for the Northern District of Alabama.
In the federal case, RAM-Ellsworth filed a summary-judgment
motion concerning MCA's claims in which RAM-Ellsworth made the
exact same arguments RAM presents in this case: "because MCA did not
have a valid Alabama general contractor's license when MCA became
responsible for work on the Ellsworth subdivision project, as a matter of
public policy, MCA cannot recover for the work it performed," and "even
after MCA held a valid general contractor's license under Alabama Code
§ 34-8-1, the license had the incorrect classification; MCA had a 'building
38
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construction' classification on its license, but the work MCA performed
required MCA to have a 'municipal and utility' classification." Id.
The federal district court in RAM-Ellsworth rejected those
arguments and denied the summary-judgment motion.
"The cases on which RAM[-Ellsworth] relies for its argument
are distinguishable from this case. In each, the contractor did
not have a valid license at any point during the execution or
performance of the contract at issue. Cooper[ v. Johnston],
[283 Ala. 565,] 219 So. 2d [392,] 396 [(1969)]; Cochran v.
Ozark Country Club, Inc., 339 So. 2d 1023, 1024 (Ala. 1976);
Dabbs v. Four Tees, Inc., 36 So. 3d 542, 555 (Ala. Civ. App.
2008) ('Because Graves was not a licensed contractor at the
time that he performed the work for the Dabbses, their oral
contract for the construction of the project is unenforceable.');
White v. Miller, 718 So. 2d 88, 89 (Ala. Civ. App. 1998);
Hawkins v. League, 398 So. 2d 232, 237 (Ala. 1981);
Architectural Graphics[ & Constr. Servs., Inc. v. Pitman], 417
So. 2d [574,] 576 [(Ala. 1982)] (contractor could not recover for
work performed without a license where contractor obtained
a valid license after construction was complete); J & M
Indus.[, Inc. v. Huguley Oil Co.], 546 So. 2d [367,] 370 [(Ala.
1989)]; KLW Enters., Inc. v. W. Ala. Com. Indus., Inc., 31 So.
3d 136, 140 (Ala. Civ. App. 2009). None of the cases RAM[-
Ellsworth] directly cites concerns a general contractor's
compliance with the licensing statute during the performance
of the contract.
"The Alabama Supreme Court has permitted general
contractors to seek recovery for services rendered without
strict compliance with the general contractor's licensing
statute. See McNairy v. Sugar Creek Resort, Inc., 576 So. 2d
185, 187 (Ala. 1991) (contractor entitled to seek payment for
services where contractor substantially complied with
licensing requirements and contract was ratified after
39
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contractor received his license); Twickenham Station, Inc. v.
Beddingfield, 404 So. 2d 43, 46 (Ala. 1981) ('At all times
during the contracts there was a valid general contractor's
license in the Beddingfield name. Although the Beddingfields'
license did not reflect the exact business entity under which
they did business until after the contract was completed, we
believe there was substantial compliance with the licensing
statute.').
"In McNairy, the general contractor, Mr. McNairy,
applied for a contractor's license with Alabama's State
Licensing Board on July 6, 1987. 576 So. 2d at 185. With his
application, Mr. McNairy filed a confidential financial
statement and an authorization for his bank to release
information to the Board concerning his finances. 576 So. 2d
at 185-86. The bank did not provide Mr. McNairy's
information to the Licensing Board on time, so Mr. McNairy's
license was delayed until June 20, 1988. 576 So. 2d at 186.
Before receiving his license, Mr. McNairy entered a contract
with Sugar Creek Resort to clear areas for golfing ranges and
build a road. 576 So. 2d at 186. After Mr. McNairy began
working on the project and submitted bills to Sugar Creek,
Mr. McNairy received his general contractor license. 576 So.
2d at 186. Sugar Creek acknowledged the amount due for
work performed both before and after Mr. McNairy received
his license. 576 So. 2d at 186. When Sugar Creek paid Mr.
McNairy only some of the amount due for his services, Mr.
McNairy filed a mechanics lien to recover the balance. 576 So.
2d at 186.
"The trial court reasoned that because Mr. McNairy did
not have a general contractor's license when he agreed to
perform work for Sugar Creek, he could not recover under the
agreement. 576 So. 2d at 186. The Alabama Supreme Court
reversed. Though Mr. McNairy did not have a valid license
when he entered the agreement with Sugar Creek, 'McNairy
continued to perform work for Sugar Creek, and its president,
Carroll Wright, continued to acknowledge, both before and
40
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after the license was issued, that McNairy was entitled to
receive payment for this work.' 576 So. 2d at 187. The
Alabama Supreme Court relied on its decision in Day v. Ray
E. Friedman & Co., 395 So. 2d 54 (Ala. 1981). In that case, the
Alabama Supreme Court held that allowing a plaintiff who
substantially complies with a licensing statute to recover
under a contract does not defeat the penal purpose of the
licensing statute. 576 So. 2d at 187. The Alabama Supreme
Court found that 'the purpose of the statute [was] not defeated
by allowing McNairy to proceed to trial on his claim for monies
due him for work and labor done under his agreement with
Sugar Creek.' 576 So. 2d at 187-88.
"RAM[-Ellsworth] argues that McNairy was wrongly
decided, has been 'utterly ignored' by Alabama courts in
addressing breach of contract claims with unlicensed
contractors, and is factually distinguishable and thus not
applicable.... The Court is not persuaded, and this Court is not
alone.
In RC Underground v. Western Surety Company, Case
No. 5:20-cv-01222-LCB (N.D. Ala. July 14, 2021), plaintiff RC
Underground contracted with Bear Communications, LLC to
perform drilling work on a public-works project. The day after
it signed the agreement for the work, RC applied to the
Alabama Secretary of State's Office to do business in Alabama
as a foreign company. The Secretary of State's Office initially
rejected RC's application but later issued the license. Before
RC received its license, RC began working on the project and
kept Bear apprised of the status of the license applications.
Bear made several payments to RC for its work on the project.
After Bear stopped making payments, RC sued Western
Surety Company to recover on the bond Western provided
Bear for the project.
"Western moved to dismiss, arguing that RC's contract
with Bear was unenforceable because RC was not a licensed
subcontractor. Citing McNairy, RC argued that dismissal was
41
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inappropriate because the company had substantially
complied with the contractor licensing requirements. Western
argued that the facts were unlike McNairy and that McNairy
is an outlier. The district court rejected Western's argument,
stating:
" 'Despite Western's protestations to the
contrary, McNairy's facts are markedly similar to
those before the Court. The record shows that RC
appropriately sought a license from the Secretary,
that Bear was aware of RC's application and
assisted RC with it, that Bear repeatedly ratified
and adopted the parties' agreement before and
following licensure, and that the amount RC seeks
to collect is directly related to work completed
following its licensure. ...
" 'While the Court is mindful that McNairy
has been sparsely cited in the 30 years since it was
issued, this does not detract from its precedential
value. Rather, absent a clear indication to the
contrary from the Alabama Supreme Court,
McNairy controls and the Court is bound to apply
it. ... Because the Alabama Supreme Court has
found a substantial compliance exception to the
state's contractor licensing requirements and RC's
actions meet its requirements, the Court finds
dismissal inappropriate.'
"RC Underground, Case No. 5:20-cv-01222-LCB (N.D. Ala.
July 14, 2021) ....
"As in RC Underground, this Court concludes that
McNairy is binding, relevant authority. As a federal court
sitting in diversity, this Court must 'apply the law of the state
in which the federal court sits' and 'should, whenever possible,
"reach the same result as the state court would reach in
deciding the identical issue." ' Goodwin v. George Fischer
42
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Foundry Sys., Inc., 769 F.2d 708, 711 (11th Cir. 1985) (quoting
Trimper v. Nationwide Ins. Co., 540 F. Supp. 1188 (D.S.C.
1982)). Thus, this Court must 'function as an Alabama court
in deciding the issue presented in this case' -- that is, whether
an agreement to provide construction services is void as a
matter of public policy when the general contractor has
substantially complied with the state's licensing statute
during performance of the contract. Goodwin, 769 F.2d at 711.
"In Goodwin, in addressing whether a contract should
not be enforced as a matter of public policy, the Eleventh
Circuit observed that Alabama courts have stated: 'the true
test to determine whether a contract is unenforceable because
of public policy is "whether the public interest is injuriously
affected in such substantial manner that private rights and
interests should yield to those of the public." ' 769 F.2d at 713
(quoting Colston v. Gulf States Paper Corp., [291 Ala. 423,]
282 So. 2d 251, 255 (Ala. 1973)). '[T]he principle that contracts
contravening public policy are unenforceable should be
applied cautiously and only in cases plainly within the reason
for it,' Goodwin, 769 F.2d at 713 (citing Lowery v. Zorn, [243
Ala. 285,] 9 So. 2d 872, 874 (Ala. 1942)), and '[i]t is repeated
often in the cases that there must be a dominating public
interest,' Goodwin, 769 F.2d at 713 (citing Ex parte Rice, [258
Ala. 132,] 61 So. 2d 7 (Ala. 1952)).
"In a case dealing with the enforceability of a contract
under a similar licensing statute, the Alabama Court of Civil
Appeals explained the power of a court to declare a contract
void as a matter of public policy 'should be exercised only in
cases free from doubt':
" 'The courts are averse to holding contracts
unenforceable on the ground of public policy unless
their illegality is clear and certain. Since the right
of private contract is no small part of the liberty of
the citizen, the usual and most important function
of courts of justice is to maintain and enforce
43
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contracts rather than to enable parties thereto to
escape from their obligations on the pretext of
public policy, unless it clearly appears that they
contravene public right or the public welfare. ...
" 'Many courts have cautioned against
recklessness in condemning agreements as being
in violation of public policy. Public policy, some
courts have said, is a term of vague and uncertain
meaning which it is the duty of the law-making
power to define, and courts are apt to encroach
upon the domain of that branch of the government
if they characterize a transaction as invalid
because it is contrary to public policy, unless the
transaction contravenes some positive statute or
some well-established rule of law. Other courts
have approved the statement of an English judge
that public policy is an unruly horse astride of
which one may be carried into unknown paths.
Considerations such as these have led to the
statement that the power of the courts to declare
an agreement void for being in contravention of
sound public policy is a very delicate and
undefined power and, like the power to declare a
statute unconstitutional, should be exercised only
in cases free from doubt.'
"Terrell v. Oak & Alley Homes, LLC, 334 So. 3d 506, 512-13
(Ala. Civ. App. 2021) (citation omitted) (quoting Milton Const.
Co. v. State Highway Dep't, 568 So. 2d 784, 788 (Ala. 1990),
overruled in part on other grounds by Ex parte Ala. Dep't of
Transp., 978 So. 2d 17, 23 (Ala. 2007)).
"Applying these principles, Alabama public policy does
not prevent MCA from recovering for the work it performed
for RAM[-Ellsworth] on the Ellsworth project. Even if the
parties' agreement concerning the project predates MCA's
acquisition of an Alabama license with a proper designation
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for the work performed, the evidence shows that MCA
previously had held an Alabama general contractor's license
under the name 'Construction Services LLC,' and MCA was
licensed in other states and was seeking reciprocity. The
Licensing Board issued MCA's general contractor's license
fewer than two months after MCA applied for the license.
MCA worked on the Ellsworth project and received payment
from RAM[-Ellsworth] for approximately one year before the
parties' relationship soured. During that year, RAM[-
Ellsworth] and MCA expanded the scope of MCA's work on
the Ellsworth project to add sewer repairs. RAM[-Ellsworth]
has admitted that it paid MCA's pre-licensure invoices. As in
McNairy and RC Underground, the amount that MCA seeks
to recover relates directly to work MCA performed after it
received its license, and by its partial payments to MCA for
work performed after MCA received its license,
RAM[-Ellsworth] acknowledged that MCA was entitled to
receive payment for services rendered. Allowing MCA to
recover for work performed for RAM[-Ellsworth] does not
defeat the purpose of Alabama's general contractor's licensing
statute.
"To the extent RAM[-Ellsworth] argues that MCA did
not have the correct license classification for the work
performed, RAM[-Ellsworth] has not cited binding or
persuasive authority to support the proposition that a
contractor with a valid license cannot recover for work
performed because the license did not have the correct
classification.5 If MCA had to have a 'municipal and utility'
classification on its license for the work it performed, McNairy
still applies because MCA substantially complied with the
statute.
"____________________
"5To support its argument that MCA cannot recover
because it did not have the correct classification on its license,
RAM[-Ellsworth] points to a case in the Circuit Court of
Baldwin County, Alabama involving a nearly identical
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SC-2025-0774
dispute between MCA and RAM-Robertsdale Subdivision
Partners, LLC. RAM-Robertsdale Subdivision Partners, LLC
v. Constr. Servs., LLC d/b/a MCA Construction, Inc., et al., 05-
CV-2022-900285 (Cir. Ct. Baldwin Cnty. Nov. 10, 2022),
appeal dismissed sub nom. Constr. Servs., LLC v. RAM-
Robertsdale Subdivisions Partners, LLC, 395 So. 3d 468 ...
(Ala. 2024). There, the state trial court granted summary
judgment in favor of RAM-Robertsdale on the issue of whether
MCA was barred from enforcing its contract because it did not
have a 'municipal and utility' classification. The trial court's
decision is not binding on this Court, and the trial court
offered no explanation or analysis for its ruling. ... Therefore,
the Court will not follow the state trial court's decision."
Id.
Although the facts in RAM-Ellsworth are very similar to those in
this case, RAM-Ellsworth presented the further complication that MCA
did not possess an Alabama general contractor's license of any kind when
it assumed the responsibility of working on the Ellsworth Subdivision
project. In contrast, in this case, it is undisputed that MCA possessed a
general contractor's license with a BC classification before it executed the
contract with RAM. Here, RAM essentially argues that the distinction is
irrelevant because a "mis-classified" license is the same as possessing no
license -- even though none of our cases have so held.
What RAM-Ellsworth -- and the Alabama case the federal district
court relies upon, McNairy -- illuminate is that there is a difference
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between regulatory exactitude and the application of court-imposed
public policy. RAM contends, as RAM-Ellsworth did in the federal district
court, that McNairy is a "lonely outlier" that "Alabama appellate courts
have since ignored," and yet, simultaneously, that it somehow has
"created confusion and havoc." RAM's brief, p. 51. RAM asks us to
overrule McNairy. However, as the RAM-Ellsworth court noted, McNairy
is similar in principle to Twickenham Station, Inc. v. Beddingfield, 404
So. 2d 43 (Ala. 1981). Beddingfield concerned the validity of contracts
between a restaurant, Twickenham Station, Inc. ("Twickenham"), and a
family's construction company ("the Beddingfields") for the Beddingfields
to perform work on Twickenham's establishment. The Beddingfields
sometimes labeled their entity a "partnership" and sometimes labeled it
a "corporation" -- in part because they did not understand the legal
differences between the two types of entities. There was conflicting
evidence as to whether the contracts were executed in the name of the
partnership or the corporation. Regardless, neither the partnership name
nor the corporate name was the exact name on the Beddingfields' general
contractor's license. Twickenham contended that, "because a general
contractor's license was not issued in the name under which [the
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Beddingfields] were doing business, there was no compliance with [the
AGCPA], and that the contracts were, thus, null and void." Beddingfield,
404 So. 2d at 45. The Court disagreed with Twickenham, contrasting the
facts with those in Cooper because Twickenham had contended that
Cooper supported its position.
"We are of the opinion that Cooper[ v. Johnston, 283 Ala. 565,
219 So. 2d 392 (1969),] is controlling, but we interpret it
differently from the construction Twickenham places on it. In
Cooper, this court denied recovery under a construction
contract to Johnston, an unlicensed general contractor who
attempted to circumvent the licensing statute. There,
Johnston, by written authorization, sought to use the license
of Gunn Lumber Company to perform the work of a general
contractor. In reviewing the written authorization, this court
wrote:
" '[It was nothing] more than an effort on the part
of Gunn Lumber Company, based on a
consideration, to permit appellee to use its license
in the execution of the contract for the erection of
the building. Appellee was not connected with
Gunn Lumber Company as an officer, partner or
employee. The writing was just an attempt on the
part of appellee to escape the provisions of [the
AGCPA] and to operate in the field of general
contracting contrary to law. Gunn Lumber
Company was in no way responsible for the
erection of the building, nor was it a party directly
or indirectly, to the contract of appellee for such
erection. We find no provision in [the AGCPA]
permitting one to use the contractor's license of
another in the manner here undertaken.'
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"Cooper, [283 Ala.] at 569, 219 So. 2d 392.
"The facts in Cooper are different from those in this case.
Unlike Cooper, there was not an attempt by the Beddingfields
to circumvent [the AGCPA]. At all times during the contracts
there was a valid general contractor's license in the
Beddingfield name. Although the Beddingfields' license did
not reflect the exact business entity under which they did
business until after the contract was completed, we believe
there was substantial compliance with the licensing statute.
There is little doubt from the record that the discrepancy
between the name in which the Beddingfield license was held
and that under which they contracted was due to a lack of
business sophistication. Twickenham's contention that a
fraud was worked upon it is wholly without merit. Clayton
Broch, who negotiated both contracts on behalf of
Twickenham, testified, regarding the Montgomery contract,
that he did not believe the Beddingfields' corporation to be
more reliable than their partnership, and that he had no
knowledge as to how they were licensed as general
contractors. The record is devoid of a showing of fraud on the
Beddingfields' part."
Id. at 46.
Thus, as in McNairy, the Court in Beddingfield concluded that the
general contractor had substantially complied with the AGCPA. RAM's
only response to Beddingfield is an assertion, without further
explanation, that "[a] misnamed contractor classified for the correct type
of work does not pose the same public harms as MCA does." RAM's brief,
p. 46 n.10. It is unclear to this Court what "public harms" RAM is
referring to given that MCA possessed a general contractor's license with
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a BC classification for the entire duration of its work on the Amberly
Subdivision project, and MCA added an MU classification before it began
the utility work.7 Like the general contractors in McNairy and
Beddingfield, and unlike the general contractor in Cooper, MCA's actions
were not "based on 'creative schemes' designed to circumvent [the
AGCPA's] requirements." Med Plus Properties, 628 So. 2d at 374 (quoting
J & M Industries, 546 So. 2d at 371)). MCA attempted to comply with the
AGCPA and its supporting regulations in every way. In fact, unlike the
situations in McNairy and RAM-Ellsworth, MCA did possess a general
contractor's license at the time the contract with RAM was executed.
In the situation presented in this case, we see no reason to invoke
the public policy of declaring the contract between RAM and MCA void
on the ground that MCA lacked an MU classification at the time the
contract was executed. The language in the AGCPA does not require the
application of our public policy when it will not serve the purpose of
"protect[ing] the public against incompetent contractors for certain-type
7RAM itself apparently foresaw no dangers with MCA's licensing
situation because it contracted with MCA when it held a general
contractor's license with a BC classification, RAM repeatedly paid MCA
invoices when MCA did not have an MU classification, and RAM also
paid MCA after it added the MU classification to its license.
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structures." Cooper, 283 Ala. at 567, 219 at 394. Here, there is no
evidence that MCA had engaged in a scheme to circumvent the licensing
requirements of the AGCPA. At the very least, MCA substantially
complied with the AGCPA. Therefore, the circuit court's summary
judgment was erroneous.
IV. Conclusion
Based on the foregoing, we reverse the circuit court's summary
judgment in favor of the RAM parties, and we remand the case for further
proceedings.
REVERSED AND REMANDED.
Stewart, C.J., and Shaw, Bryan, and McCool, JJ., concur.
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