SB 1081 Permits contractors to resolve lawsuits without litigation
Sponsor:Kinder Co-Sponsor(s)
LR Number:3591S.14T Fiscal Note:3591-14
Committee:Pensions and General Laws
Last Action:09/15/04 - S defeats motion to override Governor's veto (Kinder) Journal page:S5
Effective Date:August 28, 2004
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Current Bill Summary

CCS/HS/HCS/SS/SCS/SB 1081 - This act permits contractors to resolve law suits without litigation.

Contractors shall provide notice in contracts with homeowners for the sale, construction or substantial remodel of a residence. The notice sets out required procedures for resolving disputes with contractors. (Section 431.303).

Before filing an action against a contractor claiming a construction defect relating to the construction or remodel of a residence, the homeowner must serve the contractor with notice of the claim of construction defects. The homeowner must wait ninety days before filing an action. During that time, the contractor must respond to the claim, which may include offers to inspect the residence, remedy of all or part of the claim or deny the homeowner's claim. An action can be filed if the contractor violates any of the requirements of the act. Homeowners who decide to use small claim court does not have to submit to mediation under this act. The requirements of this act do not apply to a subrogated insurance claim.

The claimant may reject the offer of compromise from the contractor. The parties must then attempt to mediate the claim as provided in this act. If the claim is not resolved by mediation, the claimant may file an action against the contractor. But none of the written statements of the parties may be used against the parties in a subsequent cause of action and the mediator may not be subpoenaed.

If the homeowner elects to allow the contractor to inspect the residence, the parties shall agree on a time and place for the inspection within 14 days. The inspection shall occur 30 days from the date that the homeowner elects to allow the contractor to inspect. Within 14 days after the inspection, the contractor may provide the claimant with a written offer to remedy the defect, make an offer of monetary settlement, or deny liability. If the contractor does not adhere to the timetable under this section, the claimant may file suit. If the claimant rejects the offer of settlement, the matter must be mediated.

All civil actions that do not follow the requirements of this act shall be dismissed without prejudice. However, the adherence to the requisites of this act will toll the statute of limitations.

If immediate action by the homeowner is needed to prevent injury because of construction defects, including garage doors, that threaten the life, physical health (not including emotional or mental health) or safety of persons, the homeowner can make such repairs and may include the costs of repairs in the written notice of construction defects. Any other homeowner repairs may not be included in the claim. (Section 431.306).

The act establishes a cause of action that can be brought on behalf of the homeowners' association when two or more residences have the same cause of action. Prior to filing an action, the board must provide written notice of the action to each homeowner in the association. A majority of the homeowners must consent in writing to proceed with an action.

Unless the contractor fails to comply with the requisites of the act, or fails to respond or make agreed upon repairs the claimant must seek mediation before commencing any civil action. The mediation must commence within 45 days of a request for mediation by either party. Documents or statements used in mediation cannot be used in any subsequent civil action (Section 431.312).

Nothing in this act shall be construed to create a theory or action of action upon which liability may be based or to limit any causes of action otherwise available to a homeowner or contractor. Nothing in this act shall also be construed to prevent contracts between homeowners and contractors calling for binding arbitration (Section 431.315). This act shall not apply to an action brought by an insurer if payment was made by the insurer pursuant to a claim under an insurance policy. If the action is equal or less than the applicable small claims jurisdictional amount, the claimant must pay the mediator $500.