Bill Text: CA SB1465 | 2017-2018 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Contractors: civil actions: reporting.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Passed) 2018-09-18 - Chaptered by Secretary of State. Chapter 514, Statutes of 2018. [SB1465 Detail]

Download: California-2017-SB1465-Amended.html

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Amended  IN  Assembly  June 20, 2018

Amended  IN  Senate  May 25, 2018

Amended  IN  Senate  May 14, 2018

Amended  IN  Senate  April 17, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill

No. 1465

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Introduced by Senator Hill
(Coauthor: Senator Skinner)

February 16, 2018

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An act to add Sections 7071.20, 7071.21, and 7071.22 to the Business and Professions Code, relating to professions and vocations.

LEGISLATIVE COUNSEL'S DIGEST

SB 1465, as amended, Hill. Contractors: civil actions: reporting.

Existing law, the Contractors’ State License Law, provides for the licensure, regulation, and discipline of contractors by the Contractors’ State License Board. Existing law requires the board, with the approval of the Director of Consumer Affairs, to appoint a registrar of contractors to serve as the executive officer and secretary of the board. Under existing law, protection of the public is required to be the highest priority for the Contractors’ State License Board in exercising its licensing, regulatory, and disciplinary functions. Existing law requires a licensee to report to the registrar within 90 days of the date that the licensee has knowledge of the conviction of the licensee for any felony or any other crime substantially related to the qualifications, functions, and duties of a licensed contractor.

This bill would require a licensee to report to the registrar within 90 days of the date that the licensee has knowledge of any civil action resulting in a final judgment, executed settlement agreement, or final arbitration award against the licensee in an action in which the licensee is named as a defendant or cross-defendant, that meets specified criteria, including that the amount or value of the judgment, settlement payment, or award is $1,000,000 or greater and that the action is the result of a claim for damages to a property or person allegedly caused by specified construction activities of a licensee on any part of a multifamily rental residential structure, as specified. The bill would further require, within 30 days of all or a portion of the judgment, settlement payment, or award, an insurer providing a specified type of insurance to that licensee to report listed information relating to the judgment, settlement payment, or award to the registrar.

Digest Key

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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Bill Text

The people of the State of California do enact as follows:

SECTION 1.

 Section 7071.20 is added to the Business and Professions Code, to read:

7071.20.

 (a) A licensee shall report to the registrar in writing within 90 days after the licensee has knowledge of any civil action final judgment, executed settlement agreement, or final arbitration award resulting in a final judgment, executed settlement agreement, or final arbitration award in which the licensee is named in a defending capacity, as a defendant or cross-defendant, filed on or after January 1, 2019, that meets all of the following criteria:

(1) The action alleges fraud, deceit, negligence, breach of contract or express or implied warranty, misrepresentation, incompetence, recklessness, wrongful death, or strict liability by the act or omission of a licensee while acting in the capacity of a contractor, whether as a general contractor or as a specialty contractor.

(2) The amount or value of the judgment, settlement payment, or arbitration award against the licensee for which the licensee is named as a defendant or cross-defendant, is one million dollars ($1,000,000) or greater, not including investigative costs or prior repairs performed by the licensee.

(3) The action is the result of a claim for damages to a property or person that allegedly resulted in a failure or condition that would probably result in a failure in the load bearing portions of a multifamily rental residential structure, which portions of the structure are not constructed in compliance with the codes in effect at the time of construction and that the failure or condition results in the inability to reasonably use the affected portion of the structure for which it was intended.

(4) The action is the result of a claim for damages to a property or person that was allegedly caused by a licensee’s construction, repair, alteration to, subtraction from, improvement of, moving, wrecking, or demolishing of, any part of a multifamily rental residential structure, either personally or by or through others.

(5) The action, if a civil action, has been designated by a court of competent jurisdiction as a “complex case” pursuant to rules 3.400 to 3.403, inclusive, of the California Rules of Court because it involves a claim of construction defect or insurance coverage arising out of a construction defect claim, pursuant to paragraph (2) or (7) of subdivision (c) of Rule 3.400 of the California Rules of Court.

(b) This section shall not apply to residential construction subject to any part of Title 7 (commencing with Section 895) of Part 2 of Division 2 of the Civil Code.

(c) In an action that meets the criteria of this section, in which more than one contractor is named as a defendant or cross-defendant, all contractors who are apportioned any liability either by the court or pursuant to an agreement between parties, shall report the action pursuant to subdivision (a). This subdivision does not apply to a contractor who is named as a defendant or cross-defendant, but is not assigned any liability in the action.

(c)

(d) The reports required by this section shall be signed by the licensee and shall set forth the license number of the licensee and the facts that constitute the reportable event. If the reportable event involves the action of a court, the report shall also set forth the following:

(1) The title of the matter.

(2) The court or agency name.

(3) The docket number.

(4) The claim or file number.

(5) The date on which the reportable event occurred.

(d)

(e) The reports required by this section shall be regarded by the registrar as a complaint that shall be subject to the provisions of Sections 7090 and 7091. The disclosure of any complaint referred to investigation pursuant to this section shall comply with the public disclosure provisions of Section 7124.6.

(e)

(f) Failure of a licensee to report to the registrar in the time and manner required by this section shall be grounds for disciplinary action. Criminal penalties shall not be imposed for a violation of this section.

SEC. 2.

 Section 7071.21 is added to the Business and Professions Code, to read:

7071.21.

 (a) An insurer providing a licensee commercial general liability insurance, construction defect insurance, or professional liability insurance shall report to the registrar within 30 days of all or a portion of a civil action judgment, settlement payment, or arbitration award, that meets all of the requirements of Section 7071.20, against the licensee all of the following:

(1) The name and license number of the licensee.

(2) The claim or file number.

(3) The amount or value of the judgment, settlement payment, or arbitration award.

(4) The amount paid by the insurer.

(5) The identity of the payee.

(b) The reports required by this section shall be regarded by the registrar as a complaint that shall be subject to the provisions of Sections 7090 and 7091. The disclosure of any complaint referred to investigation pursuant to this section shall comply with the public disclosure provisions of Section 7124.6.

SEC. 3.

 Section 7071.22 is added to the Business and Professions Code, to read:

7071.22.

 (a) Sections 7071.20 and 7071.21 shall apply if a party to the civil action, judgment, settlement payment, or arbitration award is or was a licensee, as defined in Section 7096, or was a member of the personnel of the record, a person, or a qualifying person, as those terms are defined in Section 7025.

(b) Notwithstanding any other law, a licensee or person providing a report to the registrar pursuant to Section 7071.20 or 7071.21 shall not be considered to have violated a confidential settlement agreement or other confidential agreement.

(c) The board may adopt regulations to further the purposes of Sections 7071.20 and 7071.21, specifically with regard to the reporting requirements of those sections.