71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 1125
B-Engrossed
House Bill 2202
Ordered by the House April 5
Including House Amendments dated February 6 and April 5
Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
Presession filed (at the request of Governor John A. Kitzhaber,
M.D., for Construction Contractors Board)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
Allows Construction Contractors Board to require that hearings
for certain claims against contractors be conducted as
arbitration unless party elects otherwise. Specifies arbitration
rights subject to waiver by contractor. Reorganizes statutes.
A BILL FOR AN ACT
Relating to claims against construction contractors; creating new
provisions; and amending ORS 701.140, 701.145 and 701.180.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + Sections 2 to 5 of this 2001 Act are added to
and made a part of ORS chapter 701. + }
SECTION 2. { + The Construction Contractors Board may not
process a claim against a licensed contractor, including a claim
based upon a court judgment or arbitration award, unless the
claim is filed in a timely manner as follows:
(1) Except as otherwise provided in this section, if the owner
of a new structure files the claim, the board must receive the
claim no later than the earlier of:
(a) One year after the date the structure was first occupied;
or
(b) Two years after substantial completion of the structure by
the contractor filed against.
(2) Except as otherwise provided in this section, if the owner
of an existing structure files the claim, the board must receive
the claim no later than one year after the date the work was
substantially completed by the contractor filed against.
(3) Regardless of whether the claim involves a new or existing
structure, if the owner of the structure files the claim because
the contractor failed to begin the work, the board must receive
the claim no later than one year after the date the parties
entered into the contract.
(4) Regardless of whether the claim involves a new or existing
structure, if the owner of the structure files the claim because
the licensed contractor failed to substantially complete the
work, the board must receive the claim no later than one year
after the date the contractor ceased to work on the structure.
(5) If a licensed contractor files the claim against the
licensed contractor performing work as a subcontractor on a new
structure, the board must receive the claim no later than the
earlier of:
(a) Fourteen months after the date the structure was first
occupied; or
(b) Two years after substantial completion of the structure.
(6) If a licensed contractor files the claim against the
licensed contractor performing work as a subcontractor on an
existing structure, the board must receive the claim no later
than 14 months after the date the work on the structure was
substantially completed.
(7) If a licensed contractor files the claim against the
licensed contractor performing work on a structure as a
subcontractor because the subcontractor failed to substantially
complete the work, the board must receive the claim no later than
14 months after the date the subcontractor ceased to work on the
structure.
(8) If the licensed contractor's employee, subcontractor or
material or equipment supplier files the claim, the board must
receive the claim no later than one year after the date the
contractor incurred the indebtedness. + }
SECTION 3. { + (1) Except for claims by owners of
nonresidential property when the total contract is $25,000 or
less, if a claim against a licensed contractor involves a
nonresidential structure, the person filing the claim must:
(a) Bring an action on the claim against the licensed
contractor in a court of competent jurisdiction; or
(b) Initiate a proceeding to resolve the claim through binding
arbitration substantially in conformance with ORS 36.300 to
36.365. At the option of the claimant, a person filing a claim as
an owner of nonresidential property when the total contract is
$25,000 or less may elect to bring a court action or initiate
arbitration and seek to claim against the bond in the same manner
as if the total contract exceeded $25,000. If the person makes
that election, all statutes and rules applicable to the
processing of claims in accordance with this section apply to the
claim.
(2) The claimant must file the claim with the Construction
Contractors Board by delivering a copy of the complaint or the
demand for arbitration or other document that is necessary to
initiate arbitration to the board. The claimant must also give
notice to the surety on the bond by delivering the complaint or
the demand for arbitration or other document necessary to
initiate arbitration to the surety. Delivery of the notice to the
board and the surety must be accomplished by certified mail,
return receipt requested, no later than the earlier of:
(a) The 90th day after the complaint was filed or made; or
(b) The 14th day before the first day of arbitration or trial.
(3) Filing the claim with the board under subsection (2) of
this section constitutes filing the claim for purposes of
establishing timeliness of the claim under section 2 of this 2001
Act and priority of the claim under ORS 701.150.
(4) Except as provided in this subsection and subsection (7) of
this section, if a claimant properly gives notice of a claim to a
surety, a judgment against the contractor entered in the action
is binding on the surety. If the claimant delivers notice of the
claim to the wrong surety, the surety receiving the notice may
avoid being bound by a judgment or award by delivering notice of
the mistake to the claimant or the claimant's attorney of record,
and to the board, on or before the 30th day after the surety
receives the notice of claim. Delivery of the notice of mistake
must be by certified mail, return receipt requested, or by
facsimile machine or other form of transmission with an
acknowledgment of receipt.
(5) A surety under subsection (2) of this section has an
absolute right to intervene in an action or arbitration brought
or initiated under subsection (1) of this section. A claimant may
not join a surety as a party to an action or arbitration unless
the claimant disputes the validity or timeliness of the surety's
notice of mistake or the surety disputes the validity or
timeliness of the delivery to the surety of the complaint or the
demand or other document necessary to initiate arbitration to the
surety. If the surety elects to intervene or is joined as a
party, the surety is bound by all issues of fact and law
determined by the court or arbitrator and may not seek board
review of those determinations.
(6) If a court issues a judgment on an action, or reduces an
arbitration award to judgment, against a contractor in an action
described in subsection (1) of this section, the claimant must
deliver a certified copy of the judgment to the board and to the
surety no later than the 30th day after entry of the judgment in
order to retain a claim against the bond. The entry of a final
judgment against the contractor concludes the contractor's
involvement in any proceedings to determine whether the bond is
subject to payment of the claim. The claimant and the surety are
the only parties to the administrative process set forth in
subsection (7) of this section.
(7) Upon receipt of a timely filed certified copy of a judgment
described in subsection (6) of this section, the board shall
issue a proposed order in the amount of the judgment together
with any costs, interest and attorney fees awarded by the court
under the judgment, to the extent that the judgment, costs,
interest and fees are within the jurisdiction of the board. The
board's determination of the claim is limited to whether the
claim comes within the jurisdiction of the board and is subject
to payment by the surety. The board shall issue the proposed
order in a form that indicates the surety's maximum liability to
the claimant. If a hearing is not requested within the time set
forth in the proposed order, the proposed order becomes final
without any further action by the board. If a hearing is
requested, unless review of an issue is precluded under
subsection (5) of this section, the board may determine:
(a) Whether the claim was timely filed with the board as
provided in section 2 of this 2001 Act.
(b) Whether the surety received timely notice as provided in
subsections (2) and (6) of this section.
(c) Whether the claim is for work subject to this chapter.
(d) The extent of the surety's liability to the claimant.
(8) The provisions of ORS 701.150 (4) apply to an order under
subsection (7) of this section, and the surety may file
exceptions to the proposed order if the order may cause the
liability of the surety on all claims then pending to exceed the
bond amount. The surety is not required to pay any claim under
subsection (7) of this section until the surety receives notice
from the board under ORS 701.140 that claims are ready for
payment. + }
SECTION 4. { + (1) Subject to subsection (4) of this section,
if the resolution of a claim under ORS 701.145 requires a
hearing, the Construction Contractors Board may require that the
hearing be conducted as a binding arbitration under rules adopted
by the board under subsection (3) of this section. This
subsection does not authorize the board to require binding
arbitration of a claim that is subject to section 3 of this 2001
Act.
(2) The board may use arbitration to resolve a construction
dispute between any parties who agree to follow the rules of the
board, including but not limited to parties to a claim that is
subject to section 3 of this 2001 Act.
(3) Rules adopted by the board to regulate arbitration under
subsections (1) and (2) of this section must substantially
conform with the provisions of ORS 36.300 to 36.365. The rules
may include, but are not limited to, requirements that:
(a) The arbitrator send copies of an arbitration award to the
parties and the board and allow the parties an opportunity to
request reconsideration of the award;
(b) The arbitrator address in writing any issue raised in a
request for reconsideration of the award;
(c) The arbitrator must delay submitting to the clerk of the
circuit court an arbitration award that is or may become subject
to a request for reconsideration; and
(d) The request for reconsideration and the arbitrator's
response to the request, including any matter the arbitrator is
required to address, must be included with the award of the
arbitrator and the written agreement to submit that is sent to
the clerk of the circuit court under ORS 36.350.
(4) A party to a claim that is subject to a board order of
binding arbitration under subsection (1) of this section may
avoid the arbitration if the party requests to have the claim
resolved through a contested case hearing or files a complaint in
a court. A party making a request or filing a complaint under
this subsection is subject to the following provisions:
(a) If the party requests to have a claim resolved through a
contested case hearing, the party must, within the time specified
in paragraph (c) of this subsection, deliver the request in
writing to the board and to all parties entitled by board rule to
receive a copy of the request.
(b) If the party files a complaint in court, the party must,
within the time specified in paragraph (c) of this subsection,
deliver a copy of the complaint to the board and to all parties
entitled by board rule to receive a copy of the complaint. If the
party filing the complaint is the claimant, the claimant must
allege all elements of the claim in the complaint. If the
complaint is filed by the contractor against whom a claim is
alleged, the complaint may be a complaint for damages, a
complaint for declaratory judgment or other complaint that allows
the claimant to file a response alleging the elements of the
claim. The claimant has the burden of proving the elements of
the claim in any action described in this paragraph.
(c) A party that is subject to paragraph (a) or (b) of this
subsection must deliver a request or complaint to the board as
described in paragraphs (a) and (b) of this subsection no later
than the 30th day after the board sends notice that an
arbitration hearing has been scheduled. Failure to timely deliver
a request or complaint under this paragraph constitutes consent
to the binding arbitration.
(d) If a party makes a timely request under paragraph (a) of
this subsection for a contested case hearing and another party
timely files a complaint in compliance with paragraph (b) of this
subsection, the filing of the complaint supersedes the request
for a contested case hearing.
(e) A party may not withdraw a request made in compliance with
paragraph (a) of this subsection unless all parties agree to the
withdrawal.
(f) The provisions of paragraph (b) of this subsection are in
addition to any other requirements imposed by law regarding the
filing of a complaint. + }
SECTION 5. { + (1) If a party to a claim under ORS 701.145
requests a contested case hearing, the Construction Contractors
Board shall schedule the hearing. If a claim is filed in a court,
the board shall suspend further processing of the claim until the
claim is resolved by an appropriate court.
(2) If the claim is submitted for determination by a court, the
board may require that the claimant provide status reports on the
pending action. The board may dismiss a claim filed under ORS
701.145 if the claimant fails to submit status reports on a
pending action.
(3) An arbitration conducted under section 4 (1) or (2) of this
2001 Act must be held before a hearing officer acting as
arbitrator. The hearing officer assigned to act as arbitrator of
the case on behalf of the board must be from the Hearing Officer
Panel established under section 3, chapter 849, Oregon Laws 1999.
The assignment of a hearing officer to act as arbitrator is
subject to a request for a different arbitrator under section 11,
chapter 849, Oregon Laws 1999, or a rule adopted pursuant to
section 11, chapter 849, Oregon Laws 1999.
(4) Contested case hearings before the board must be conducted
by a hearing officer assigned from the Hearing Officer Panel
established by section 3, chapter 849, Oregon Laws 1999. The
board may delegate authority to the hearing officer to issue a
final order in any matter.
(5) Sections 2 to 21, chapter 849, Oregon Laws 1999, do not
limit in any way the ability of the board to make full use of
alternative dispute resolution, including mediation or
arbitration, to resolve claims against contractors filed under
section 2 of this 2001 Act.
(6) In assigning hearing officers for arbitration and contested
case hearings conducted under the provisions of this section, the
chief hearing officer of the Hearing Officer Panel established
under section 3, chapter 849, Oregon Laws 1999, shall defer to
board requests.
(7) The board, by rule, may require a deposit not to exceed
$100 for the filing of a claim, a request for hearing or
exceptions. The prevailing party may recover a deposit required
by this subsection. + }
SECTION 6. Section 5 of this 2001 Act is amended to read:
{ + Sec. 5. + } (1) If a party to a claim under ORS 701.145
requests a contested case hearing, the Construction Contractors
Board shall schedule the hearing. If a claim is filed in a court,
the board shall suspend further processing of the claim until the
claim is resolved by an appropriate court.
(2) If the claim is submitted for determination by a court, the
board may require that the claimant provide status reports on the
pending action. The board may dismiss a claim filed under ORS
701.145 if the claimant fails to submit status reports on a
pending action.
(3) An arbitration conducted under section 4 (1) or (2) of this
2001 Act must be held before a hearing officer { - acting - }
{ + designated by the board to act + } as arbitrator. { - The
hearing officer assigned to act as arbitrator of the case on
behalf of the board must be from the Hearing Officer Panel
established under section 3, chapter 849, Oregon Laws 1999. The
assignment of a hearing officer to act as arbitrator is subject
to a request for a different arbitrator under section 11, chapter
849, Oregon Laws 1999, or a rule adopted pursuant to section 11,
chapter 849, Oregon Laws 1999. - }
(4) Contested case hearings before the board must be conducted
by { - a hearing officer assigned from the Hearing Officer
Panel established by section 3, chapter 849, Oregon Laws
1999. - } { + the board or a hearing officer designated by the
board. + } The board may delegate authority to the hearing
officer to issue a final order in any matter.
{ - (5) Sections 2 to 21, chapter 849, Oregon Laws 1999, do
not limit in any way the ability of the board to make full use of
alternative dispute resolution, including mediation or
arbitration, to resolve claims against contractors filed under
section 2 of this 2001 Act. - }
{ - (6) In assigning hearing officers for arbitration and
contested case hearings conducted under the provisions of this
section, the chief hearing officer of the Hearing Officer Panel
established under section 3, chapter 849, Oregon Laws 1999, shall
defer to board requests. - }
{ - (7) - } { + (5) + } The board, by rule, may require a
deposit not to exceed $100 for the filing of a claim, a request
for hearing or exceptions. The prevailing party may recover a
deposit required by this subsection.
SECTION 7. { + The amendments to section 5 of this 2001 Act by
section 6 of this 2001 Act become operative January 1, 2004. + }
SECTION 8. ORS 701.140 is amended to read:
701.140. The Construction Contractors Board shall only accept
and make { - determinations for damages - } { + a
determination on a claim + } against { - contractors - } { +
a contractor + } licensed under this chapter. { + The board
shall make a determination on a claim as provided under ORS
701.145 or section 3 of this 2001 Act. + } If upon final
determination and order by the board a contractor fails to pay a
claim determined against the contractor by the board, the board
shall notify the surety that payment is due from the bond
required under ORS 701.085. Claims that involve contracts for
work on nonresidential structures or the appurtenances thereto,
except claims by owners of nonresidential property when the total
contract is $25,000 or less, { - shall - } { + must + } be
resolved by a court of competent jurisdiction or through
arbitration as provided under
{ - ORS 701.145 - } { + section 3 of this 2001 Act + }.
Claims that involve contracts for work on residential structures
or the appurtenances thereto and claims by owners of
nonresidential property when the total contract is $25,000 or
less may be resolved { + by a court or through arbitration under
section 3 of this 2001 Act or may be resolved + } directly by the
board as { - set forth in - } { + provided under + } this
section { + and ORS 701.145 and section 4 of this 2001 Act + }.
The board shall only { - accept and - } make determination of
the following types of claims:
(1) Claims against a contractor by the owner of a residential
structure or other real property for the following in performing
any work subject to this chapter:
(a) Negligent work.
(b) Improper work.
(c) Breach of contract.
(2) Claims against a contractor by the owner of a residential
structure or other real property to discharge or to recoup funds
expended in discharging a lien established under ORS 87.010 to
87.060 and 87.075 to 87.093 under circumstances described under
this subsection. The board may reduce any amount adjudged by the
board under this section by any amount the claimant owes the
contractor. The board shall only determine claims under this
subsection if:
(a) The owner has paid the contractor for that contractor's
work subject to this chapter; and
(b) A lien is filed against the property of the owner under ORS
87.010 to 87.060 and 87.075 to 87.093 because the contractor
failed to pay the person claiming the lien for that person's
contribution toward completion of the improvement.
(3) Claims against a licensed subcontractor by a licensed
contractor for the following in performing any work subject to
this chapter:
(a) Negligent work;
(b) Improper work; or
(c) Breach of contract.
(4) Claims by persons furnishing labor to a contractor.
(5) Claims, as limited by rule of the board, by persons
furnishing material or renting or supplying equipment to a
contractor. The minimum limit set by the board shall not exceed
$150.
(6) Claims against a contractor by anyone who is injured as a
result of the contractor's failure to comply with the
requirements of ORS 454.605 to 454.755 or rules adopted by the
Environmental Quality Commission under ORS 454.625.
SECTION 9. ORS 701.145 is amended to read:
701.145. (1) { - Any - } { + A + } person having a claim
{ - against a contractor of the type referred to in ORS 701.140
may - } { + that may be resolved directly by the Construction
Contractors Board pursuant to ORS 701.140 must + } file with the
{ - Construction Contractors - } board a statement of the claim
in { - such form as the board prescribes - } { + a form
prescribed by the board + }.
(2) The board may { - refuse to accept, or refuse at any time
to continue processing, a - } { + suspend processing the + }
claim if { - : - } { + the board determines that the nature or
complexity of the claim is such that a court is the appropriate
forum for the adjudication of the claim. + }
{ - (a) The same facts and issues involved in the claim have
been submitted to a court of competent jurisdiction for
determination or have been submitted to any other entity
authorized by law or the parties to effect a resolution and
settlement; - }
{ + (3) The board may dismiss or close a claim as established
by rule of the board if: + }
{ - (b) - } { + (a) + } The claimant does not permit the
contractor against whom the claim is filed to be present at any
inspection made by the board;
{ - (c) - } { + (b) + } The board determines that the
contractor against whom the claim is filed is capable of
complying with recommendations made by the board relative to the
claim, but the claimant does not permit the contractor to comply
with the recommendations. { - However, - } The board may
refuse to accept or further process a claim under this paragraph
only if the contractor was licensed at the time the work was
first performed and is licensed at the time the board makes its
recommendations; { + or + }
{ - (d) The board determines that the nature or complexity of
the claim is such that a court is the appropriate forum for the
adjudication of the claim; or - }
{ - (e) - } { + (c) + } The amount in controversy is less
than an amount adopted by the board and not more than $250.
{ - (3) The board shall not process a claim, including a
claim based upon a court judgment or arbitration award, unless
the claim is filed in a timely manner as follows: - }
{ - (a) If the owner of a new structure files the claim, the
board must receive the claim not later than one year after the
date the structure was first occupied or two years after
completion, whichever comes first. - }
{ - (b) If the owner of an existing structure files the
claim, the board must receive the claim not later than one year
after the date the work was substantially completed. - }
{ - (c) Regardless of whether the claim involves a new or
existing structure, if the owner files the claim because the
contractor failed to begin the work, the board must receive the
claim not later than one year after the date the parties entered
into the contract. - }
{ - (d) Regardless of whether the claim involves a new or
existing structure, if the owner files the claim because the
contractor failed to substantially complete the work, the board
must receive the claim not later than one year after the date the
contractor ceased work on the structure. - }
{ - (e) If a licensed contractor files the claim against a
licensed contractor performing work as a subcontractor on a new
structure, the board must receive the claim not later than 14
months after the date the structure was first occupied or two
years after completion, whichever comes first. - }
{ - (f) If a licensed contractor files the claim against a
licensed contractor performing work as a subcontractor on an
existing structure, the board must receive the claim not later
than 14 months after the work on the structure was substantially
completed. - }
{ - (g) If a licensed contractor files the claim against a
licensed contractor performing work as a subcontractor, because
the subcontractor failed to substantially complete the work, the
board must receive the claim not later than 14 months after the
date the subcontractor ceased to work on the structure. - }
{ - (h) If a material or equipment supplier, an employee, or
a licensed subcontractor files the claim, the board must receive
the claim not later than one year after the date the licensee
incurred the indebtedness. - }
(4) Upon acceptance of the statement of claim, the board shall
give notice to the contractor against whom the claim is made and
shall initiate proceedings to determine the validity of the
claim. If, after investigation, the board determines that a
violation of this chapter or of any rule adopted thereunder has
occurred, or damage has been caused by the { - licensee - }
{ + contractor + }, the board may recommend to the
{ - licensee - } { + contractor + } such action as the board
considers appropriate to compensate the claimant. If the
contractor performs accordingly, the board shall give that fact
due consideration in any subsequent disciplinary proceeding
brought by the board. { + If a claim is for less than $1,000,
the board may process the claim without conducting an
investigation. + }
{ - (5) Except for claims by owners of nonresidential
property when the total contract is $25,000 or less and those
claims that are settled through binding arbitration under
subsection (9) of this section, any person with a claim against a
contractor involving nonresidential structures shall bring an
action upon the bond required by ORS 701.085, as provided in
subsections (6) to (8) of this section, in a court of competent
jurisdiction or through binding arbitration in compliance with
ORS 36.300 to 36.365. At the option of the claimant, a person
having a claim as an owner of nonresidential property when the
total contract is $25,000 or less may elect to bring an action
upon the bond in this same manner. In such instances, all other
statutes and rules applicable to the processing of claims in
accordance with subsections (5) to (8) of this section apply. - }
{ - (6) Except as set forth in subsection (5) of this
section, in order to have access to the bond required by ORS
701.085, the claimant in an action against a contractor involving
nonresidential structures must deliver a copy of the complaint to
the board and to the surety on the bond by certified mail, return
receipt requested, within 90 days of the date the complaint was
filed. The surety shall not be joined as a party to the action,
but shall have the absolute right to intervene in the action. If
notice is so given, except as provided in subsection (8) of this
section, the surety that received notice shall be bound by any
judgment entered in the action, unless within 30 days of receipt
of such notice, the surety delivers to the claimant or the
claimant's attorney of record and to the board by certified mail,
return receipt requested, or by facsimile machine or form of
transmission with an acknowledgement, a notice that the surety is
not the surety that should have received the claimant's notice.
If the claimant disputes the validity of the surety's notice, or
if the surety disputes the validity or timeliness of the delivery
of the complaint, the claimant may join the surety as a defendant
or the surety may join as a party in the action. If the surety
elects to intervene in the action or is joined as a party to the
action, it shall be bound by all issues of fact and law
determined by the court, which issues shall not then be subject
to review by the board. The date the board receives a copy of the
complaint shall be the date the board uses to establish the
priority of the claim. - }
{ - (7) If a court issues a judgment against a contractor in
an action involving nonresidential structures, the claimant shall
deliver a certified copy of the judgment to the board and to the
surety within 30 days of the date of entry of the judgment in
order to retain a claim against the bond. The entry of a final
judgment against the contractor shall fully and finally conclude
the contractor's involvement concerning participation in any and
all proceedings to determine whether its bond is subject to
payment of the claim. The contractor shall not be a party to the
administrative process set forth in subsection (8) of this
section, which shall proceed with the claimant and surety as the
only parties. - }
{ - (8)(a) Upon receipt of a timely filed copy of the
judgment specified in subsection (7) of this section, the board
shall issue a proposed order in the amount of the judgment,
together with any court costs, interest and attorney fees awarded
by the court. The board's determination of the claim shall be
limited only to determinations of whether the claim comes within
the jurisdiction of the board and is subject to payment by the
surety. The proposed order shall be issued in such form as to
indicate the surety's maximum liability to the claimant. If there
are no exceptions filed to the proposed order within the time
period provided therefor after issuance of the proposed order,
the proposed order shall become final without any further action
required by the board. The surety's right to except to the
proposed order based upon a judgment, except where the surety has
elected to intervene in the action as set forth in subsection (6)
of this section, shall be limited to the following issues: - }
{ - (A) Whether the claim was timely filed with the board as
provided in subsection (3) of this section. - }
{ - (B) Whether the surety received timely notice as provided
in subsections (6) and (7) of this section. - }
{ - (C) Whether the claim is for work subject to this chapter
provided within the State of Oregon. - }
{ - (D) The extent of the surety's liability to the
claimant. - }
{ - (b) The provisions of ORS 701.150 (4) shall in all events
apply and the surety shall be entitled to except to the proposed
order as to the specific monetary liability of the surety in
connection with all claims then pending. The surety shall not be
required to pay any claim under subsection (7) of this section
until such time as it receives notice from the board under ORS
701.140 that claims are ready for payment. - }
{ - (9) With the prior agreement of the claimant and
licensee, the board may resolve the claim through binding
arbitration under rules adopted by the board generally in
conformance with ORS 36.300 to 36.365. The board may also use the
arbitration procedure to resolve a construction dispute between
any persons who agree to follow the rules of the board. - }
{ - (10) The board may require claims of less than $1,000 to
be subject to mediation or resolved through binding arbitration.
Notwithstanding the provisions of subsection (4) of this section,
the board is not required to investigate claims of less than
$1,000. - }
{ - (11) The board may apply the provisions of subsections
(5) to (8) of this section to any arbitration decision as it
would to a judgment of a court whether the arbitration decision
is rendered by the board or by independent arbitration. - }
{ - (12) Contested case hearings before the board must be
conducted by a hearing officer assigned from the Hearing Officer
Panel established by section 3, chapter 849, Oregon Laws 1999.
The board may delegate authority to the hearing officer to issue
a final order in any matter. - }
{ - (13) The board by rule may require a deposit not to
exceed $100 for the filing of a claim, the filing of a request
for hearing or the filing of exceptions. Such deposit is
recoverable by the party. - }
{ - (14) Sections 2 to 21, chapter 849, Oregon Laws 1999, do
not limit in any way the ability of the board to make full use of
alternative dispute resolution, including mediation or
arbitration, to resolve claims against contractors filed under
the provisions of this section. In assigning hearing officers for
hearings conducted under the provisions of this section, the
chief hearing officer of the Hearing Officer Panel established
under section 3, chapter 849, Oregon Laws 1999, shall defer to
board requests. - }
SECTION 10. ORS 701.145, as amended by section 173, chapter
849, Oregon Laws 1999, is amended to read:
701.145. (1) { - Any - } { + A + } person having a claim
{ - against a contractor of the type referred to in ORS 701.140
may - } { + that may be resolved directly by the Construction
Contractors Board pursuant to ORS 701.140 must + } file with the
{ - Construction Contractors - } board a statement of the claim
in { - such form as the board prescribes - } { + a form
prescribed by the board + }.
(2) The board may { - refuse to accept, or refuse at any time
to continue processing, a - } { + suspend processing the + }
claim if { - : - } { + the board determines that the nature or
complexity of the claim is such that a court is the appropriate
forum for the adjudication of the claim. + }
{ - (a) The same facts and issues involved in the claim have
been submitted to a court of competent jurisdiction for
determination or have been submitted to any other entity
authorized by law or the parties to effect a resolution and
settlement; - }
{ + (3) The board may dismiss or close a claim as established
by rule of the board if: + }
{ - (b) - } { + (a) + } The claimant does not permit the
contractor against whom the claim is filed to be present at any
inspection made by the board;
{ - (c) - } { + (b) + } The board determines that the
contractor against whom the claim is filed is capable of
complying with recommendations made by the board relative to the
claim, but the claimant does not permit the contractor to comply
with the recommendations. { - However, - } The board may
refuse to accept or further process a claim under this paragraph
only if the contractor was licensed at the time the work was
first performed and is licensed at the time the board makes its
recommendations; { + or + }
{ - (d) The board determines that the nature or complexity of
the claim is such that a court is the appropriate forum for the
adjudication of the claim; or - }
{ - (e) - } { + (c) + } The amount in controversy is less
than an amount adopted by the board and not more than $250.
{ - (3) The board shall not process a claim, including a
claim based upon a court judgment or arbitration award, unless
the claim is filed in a timely manner as follows: - }
{ - (a) If the owner of a new structure files the claim, the
board must receive the claim not later than one year after the
date the structure was first occupied or two years after
completion, whichever comes first. - }
{ - (b) If the owner of an existing structure files the
claim, the board must receive the claim not later than one year
after the date the work was substantially completed. - }
{ - (c) Regardless of whether the claim involves a new or
existing structure, if the owner files the claim because the
contractor failed to begin the work, the board must receive the
claim not later than one year after the date the parties entered
into the contract. - }
{ - (d) Regardless of whether the claim involves a new or
existing structure, if the owner files the claim because the
contractor failed to substantially complete the work, the board
must receive the claim not later than one year after the date the
contractor ceased work on the structure. - }
{ - (e) If a licensed contractor files the claim against a
licensed contractor performing work as a subcontractor on a new
structure, the board must receive the claim not later than 14
months after the date the structure was first occupied or two
years after completion, whichever comes first. - }
{ - (f) If a licensed contractor files the claim against a
licensed contractor performing work as a subcontractor on an
existing structure, the board must receive the claim not later
than 14 months after the work on the structure was substantially
completed. - }
{ - (g) If a licensed contractor files the claim against a
licensed contractor performing work as a subcontractor, because
the subcontractor failed to substantially complete the work, the
board must receive the claim not later than 14 months after the
date the subcontractor ceased to work on the structure. - }
{ - (h) If a material or equipment supplier, an employee, or
a licensed subcontractor files the claim, the board must receive
the claim not later than one year after the date the licensee
incurred the indebtedness. - }
(4) Upon acceptance of the statement of claim, the board shall
give notice to the contractor against whom the claim is made and
shall initiate proceedings to determine the validity of the
claim. If, after investigation, the board determines that a
violation of this chapter or of any rule adopted thereunder has
occurred, or damage has been caused by the { - licensee - }
{ + contractor + }, the board may recommend to the
{ - licensee - } { + contractor + } such action as the board
considers appropriate to compensate the claimant. If the
contractor performs accordingly, the board shall give that fact
due consideration in any subsequent disciplinary proceeding
brought by the board. { + If a claim is for less than $1,000,
the board may process the claim without conducting an
investigation. + }
{ - (5) Except for claims by owners of nonresidential
property when the total contract is $25,000 or less and those
claims that are settled through binding arbitration under
subsection (9) of this section, any person with a claim against a
contractor involving nonresidential structures shall bring an
action upon the bond required by ORS 701.085, as provided in
subsections (6) to (8) of this section, in a court of competent
jurisdiction or through binding arbitration in compliance with
ORS 36.300 to 36.365. At the option of the claimant, a person
having a claim as an owner of nonresidential property when the
total contract is $25,000 or less may elect to bring an action
upon the bond in this same manner. In such instances, all other
statutes and rules applicable to the processing of claims in
accordance with subsections (5) to (8) of this section apply. - }
{ - (6) Except as set forth in subsection (5) of this
section, in order to have access to the bond required by ORS
701.085, the claimant in an action against a contractor involving
nonresidential structures must deliver a copy of the complaint to
the board and to the surety on the bond by certified mail, return
receipt requested, within 90 days of the date the complaint was
filed. The surety shall not be joined as a party to the action,
but shall have the absolute right to intervene in the action. If
notice is so given, except as provided in subsection (8) of this
section, the surety that received notice shall be bound by any
judgment entered in the action, unless within 30 days of receipt
of such notice, the surety delivers to the claimant or the
claimant's attorney of record and to the board by certified mail,
return receipt requested, or by facsimile machine or form of
transmission with an acknowledgement, a notice that the surety is
not the surety that should have received the claimant's notice.
If the claimant disputes the validity of the surety's notice, or
if the surety disputes the validity or timeliness of the delivery
of the complaint, the claimant may join the surety as a defendant
or the surety may join as a party in the action. If the surety
elects to intervene in the action or is joined as a party to the
action, it shall be bound by all issues of fact and law
determined by the court, which issues shall not then be subject
to review by the board. The date the board receives a copy of the
complaint shall be the date the board uses to establish the
priority of the claim. - }
{ - (7) If a court issues a judgment against a contractor in
an action involving nonresidential structures, the claimant shall
deliver a certified copy of the judgment to the board and to the
surety within 30 days of the date of entry of the judgment in
order to retain a claim against the bond. The entry of a final
judgment against the contractor shall fully and finally conclude
the contractor's involvement concerning participation in any and
all proceedings to determine whether its bond is subject to
payment of the claim. The contractor shall not be a party to the
administrative process set forth in subsection (8) of this
section, which shall proceed with the claimant and surety as the
only parties. - }
{ - (8)(a) Upon receipt of a timely filed copy of the
judgment specified in subsection (7) of this section, the board
shall issue a proposed order in the amount of the judgment,
together with any court costs, interest and attorney fees awarded
by the court. The board's determination of the claim shall be
limited only to determinations of whether the claim comes within
the jurisdiction of the board and is subject to payment by the
surety. The proposed order shall be issued in such form as to
indicate the surety's maximum liability to the claimant. If there
are no exceptions filed to the proposed order within the time
period provided therefor after issuance of the proposed order,
the proposed order shall become final without any further action
required by the board. The surety's right to except to the
proposed order based upon a judgment, except where the surety has
elected to intervene in the action as set forth in subsection (6)
of this section, shall be limited to the following issues: - }
{ - (A) Whether the claim was timely filed with the board as
provided in subsection (3) of this section. - }
{ - (B) Whether the surety received timely notice as provided
in subsections (6) and (7) of this section. - }
{ - (C) Whether the claim is for work subject to this chapter
provided within the State of Oregon. - }
{ - (D) The extent of the surety's liability to the
claimant. - }
{ - (b) The provisions of ORS 701.150 (4) shall in all events
apply and the surety shall be entitled to except to the proposed
order as to the specific monetary liability of the surety in
connection with all claims then pending. The surety shall not be
required to pay any claim under subsection (7) of this section
until such time as it receives notice from the board under ORS
701.140 that claims are ready for payment. - }
{ - (9) With the prior agreement of the claimant and
licensee, the board may resolve the claim through binding
arbitration under rules adopted by the board generally in
conformance with ORS 36.300 to 36.365. The board may also use the
arbitration procedure to resolve a construction dispute between
any persons who agree to follow the rules of the board. - }
{ - (10) The board may require claims of less than $1,000 to
be subject to mediation or resolved through binding arbitration.
Notwithstanding the provisions of subsection (4) of this section,
the board is not required to investigate claims of less than
$1,000. - }
{ - (11) The board may apply the provisions of subsections
(5) to (8) of this section to any arbitration decision as it
would to a judgment of a court whether the arbitration decision
is rendered by the board or by independent arbitration. - }
{ - (12) Contested case hearings before the board must be
conducted by the board or by a hearing officer designated by the
board. The board may delegate authority to the hearing officer to
issue a final order in any matter. - }
{ - (13) The board by rule may require a deposit not to
exceed $100 for the filing of a claim, the filing of a request
for hearing or the filing of exceptions. Such deposit is
recoverable by the party. - }
SECTION 11. ORS 701.180 is amended to read:
701.180. Notwithstanding the provisions of ORS 36.300 to
36.365, any other provision of law or any contractual provision,
failure of a contractor to initiate arbitration proceedings { +
pursuant to a contractual arbitration clause + } within 30 days
after notification by the Construction Contractors Board that a
claim under ORS 701.145 has been filed with the Construction
Contractors Board { - , - } is a waiver { + by the
contractor + } of any { + contractual + } right to arbitration.
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