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 3208
Senate Bill 689
Sponsored by Senator TROW, Representative SCHRADER (at the
request of Attorney General Hardy Myers)
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 as
introduced.
Changes time for filing certain claims with Construction
Contractors Board.
A BILL FOR AN ACT
Relating to claims filed with Construction Contractors Board;
creating new provisions; and amending ORS 701.145.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 701.145 is amended to read:
701.145. (1) Any person having a claim against a contractor of
the type referred to in ORS 701.140 may file with the
Construction Contractors Board a statement of the claim in such
form as the board prescribes.
(2) The board may refuse to accept, or refuse at any time to
continue processing, a claim if:
(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;
(b) The claimant does not permit the contractor against whom
the claim is filed to be present at any inspection made by the
board;
(c) 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;
(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) 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 - } { +
two years + } 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 - }
{ + two years + } 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 - }
{ + 26 + } 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 - } { + 26 + } 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, the board
may recommend to the licensee 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.
(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 2. ORS 701.145, as amended by section 173, chapter 849,
Oregon Laws 1999, is amended to read:
701.145. (1) Any person having a claim against a contractor of
the type referred to in ORS 701.140 may file with the
Construction Contractors Board a statement of the claim in such
form as the board prescribes.
(2) The board may refuse to accept, or refuse at any time to
continue processing, a claim if:
(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;
(b) The claimant does not permit the contractor against whom
the claim is filed to be present at any inspection made by the
board;
(c) 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;
(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) 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 - } { +
two years + } 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 - }
{ + two years + } 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 - }
{ + 26 + } 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 - } { + 26 + } 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, the board
may recommend to the licensee 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.
(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 3. { + A claim that arises prior to the effective date
of this 2001 Act and that has not expired under the filing
deadlines of ORS 701.145 (1999 Edition) on the effective date of
this 2001 Act may be filed within the filing deadlines
established by the amendments to ORS 701.145 by sections 1 and 2
of this 2001 Act. + }
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