Background
Construction Services, LLC—doing business as MCA Construction, Inc. (“MCA”)—is a Mississippi contractor that held a valid Alabama general contractor’s license with a “Building Construction” (BC) classification when it signed a February 2021 contract with RAM-Robertsdale Subdivision Partners, LLC (“RAM”) to perform site work on the Amberly Subdivision in Baldwin County. The $1.07 million contract called for clearing and grubbing, roadway construction, drainage, and installation of water and sewer infrastructure.
Before the contract was signed, MCA’s principal, William Miller, contacted the State Licensing Board for General Contractors (“the Board”) to ask whether the existing BC license covered all the contemplated work. The Board’s executive director confirmed that clearing and grubbing fell within BC but that underground utility work would require an additional “Municipal and Utility” (MU) classification. Miller acted on that advice: he sat for the MU exam in April 2021, filed an amendment application in May, and received the MU classification on May 12, 2021—before any underground utility work began. The Robertsdale city engineer had also issued MCA a land-disturbance permit under Alabama Code § 34-8-9 before MCA added the MU classification, relying on MCA’s existing BC license.
The parties’ relationship eventually broke down. MCA filed a $646,375.63 mechanics’ lien, and RAM sued for alleged defective work and failure to pay subcontractors. MCA counterclaimed for breach of contract and fraud, alleging unpaid invoices and being forced to prioritize work on a separate RAM project in Cullman County. The Baldwin Circuit Court granted summary judgment to RAM on all of MCA’s claims, holding that because MCA lacked an MU classification when the contract was signed in February 2021, MCA was an “unlicensed general contractor” and the entire contract was null and void under Alabama public policy. After a prior appeal was dismissed for lack of jurisdiction, the circuit court entered a final judgment, and MCA appealed again.
The Court’s Holding
A unanimous Alabama Supreme Court reversed. Justice Mendheim, joined by Chief Justice Stewart and Justices Shaw, Bryan, and McCool, held that MCA’s BC-classified general contractor’s license—valid and current at the time of contracting—was sufficient to prevent the contract from being declared void under the Alabama General Contractor’s Practice Act (AGCPA), § 34-8-1 et seq., Ala. Code 1975. The Court refused to equate “mis-licensure” (holding the wrong classification) with “non-licensure” (having no license at all).
The Court found the textual case for RAM’s position weak. The criminal penalty in § 34-8-6(a) targets contractors “not being duly authorized” to engage in “the business of general contracting”—language tracing back to the original 1935 statute, when no major work-type classifications existed. Nothing in the AGCPA makes a classification deficiency equivalent to having no license. The Court also noted significant overlap between BC and MU specialty categories in the Board’s own regulations: tasks such as site work, earthwork, concrete, and paving appear under both major classifications, meaning MCA’s alleged deficiency was genuinely unclear as a regulatory matter. RAM itself conceded that no Alabama appellate case had ever equated wrong classification with no license: “Research reveals no prior Alabama case where this Court addresses ‘mis-licensure’ versus non-licensure.”
The Court reaffirmed McNairy v. Sugar Creek Resort, Inc., 576 So. 2d 185 (Ala. 1991), and its substantial-compliance exception to the void-contract rule. McNairy held that a contractor who substantially complied with licensing requirements and whose contract was ratified after the license issued could still recover. The Court found MCA’s situation at least as strong: MCA held a BC license throughout the contract’s existence, sought Board guidance proactively before signing, obtained the MU classification before performing any utility work, and never attempted to circumvent the AGCPA through a “creative scheme.” The Court also cited Twickenham Station, Inc. v. Beddingfield, 404 So. 2d 43 (Ala. 1981)—which found substantial compliance where the contracting entity’s name did not exactly match the licensed name—to show that McNairy fits within a consistent line of authority. RAM’s request to overrule McNairy was rejected.
Key Takeaways
- An Alabama general contractor that holds a valid license at the time of contracting—even if that license lacks the specific classification for a portion of the work—does not trigger the public-policy rule voiding contracts by “unlicensed” contractors. The void-contract doctrine under the AGCPA requires no license of any kind, not merely the wrong classification.
- The Alabama Supreme Court unanimously reaffirms McNairy v. Sugar Creek Resort and the substantial-compliance doctrine. A contractor who proactively pursues and obtains the correct classification before performing the specific work requiring it has substantially complied with the AGCPA.
- For contractors: if a classification question arises before signing, seek written guidance from the Board and document the response. Obtaining any needed classification amendment before performing the regulated work—as MCA did here—is the safest path and effectively forecloses the void-contract defense.
- For owners and developers: knowingly contracting with a validly licensed (even if imperfectly classified) contractor and then continuing to pay invoices through performance undercuts any later attempt to invoke the public-policy void. Good-faith participation and continued payments are evidence that the owner did not rely on the classification deficiency and that the contract should be enforced.
Why It Matters
For Alabama construction and real estate practitioners, Construction Services v. RAM-Robertsdale draws a clear and consequential line between mis-licensure and non-licensure. The void-contract doctrine—long a potent defense for owners who wish to avoid paying general contractors—requires the contractor to be truly unlicensed, not merely holding a license that lacks an applicable classification. The Alabama General Contractor’s Practice Act was designed to protect the public against incompetent contractors, not to strip licensed contractors of their rights over regulatory technicalities when no credible public-safety concern is present.
The decision also has implications beyond subdivision work. Many projects blend BC and MU specialty tasks—a common occurrence given the overlap between the two classifications—and can no longer serve as a basis for a categorical void-contract defense simply because the contractor’s license did not carry every applicable major classification at execution. Owners who want to preserve a void-contract defense must point to the absence of any Board-issued certificate, or to an affirmative scheme to circumvent the AGCPA—a significantly higher bar than mere classification mismatch.