FINAL BILL REPORT

SB 6182

                                  C 285 L 88

BYSenator McCaslin

Denying registration if contractor has previous unsatisfied judgment.

Senate Committee on Economic Development & Labor

House Committe on Commerce & Labor

SYNOPSIS AS ENACTED

BACKGROUND:

The Department of Labor and Industries must deny an application for registration by a contractor who has been registered previously, and has either an unsatisfied final judgment entered against him/her or has a summons and complaint pending at the time of the application for re-registration.  Contractors must re-register annually.  The law provides that a contractor must post a bond with the state and lists the various acts which may give his customers or creditors a claim against the bond. 

Thus a contractor can be precluded from re-registration and the legal operation of his or her business simply on the basis of someone having filed a lawsuit against him or her regardless of whether the action has any merit.

Building contractors are not allowed to sue for the collection of compensation due from a customer unless they are registered as required by law.  Courts have used the doctrine of substantial compliance, if the contractor was bonded but not registered, to circumvent this sometimes harsh rule.

SUMMARY:

The provision denying re-registration on the basis of having a summons and complaint filed against the applicant is removed.  Re-registration must still be denied if the applicant has an unsatisfied final judgment entered against him or her.

The doctrine of substantial compliance, by which courts sometimes allow an action to proceed in the absence of strict compliance with all registration requirements, is defined.  Courts shall not find substantial compliance if the contractor has failed to supply the department with various business identification numbers, has no current registration bond or comparable security, or has failed to obtain liability insurance up to the statutorily required level.  In determining substantial compliance the court must consider the length of time a contractor did not hold a valid certificate of registration.

VOTES ON FINAL PASSAGE:

      Senate    47     0

      House 98   0 (House amended)

      House 46   0 (Senate concurred)

EFFECTIVE:June 9, 1988