The Legislature:

Assembly bill scores one for lawyers in construction defect tug of war

New version would require contractors to carry liability insurance

Wednesday, April 22, 2009 | 2 a.m.

Assembly Bill 215

Del Webb, Coventry settle plumbing lawsuit (4-3-2009)
Foes under defects law unite to push for its change (3-24-2009)
Four homebuilders settle in plumbing lawsuit (3-18-2009)
Judge orders settlement talks in plumbing defect case (3-4-2009)
Plumbing problems may continue to grow (2-23-2009)
Judge approves $90 million faulty plumbing settlement (2-2-2009)
Pipe work begins in homes involved in Kitec lawsuit (1-22-2009)
Judge releases 322 homeowners from class-action plumbing lawsuit (12-15-2008)
Couple hopes company will take action against faulty pipes (12-4-2008)
Del Webb to pay $27.2 million in faulty plumbing lawsuit (12-3-2008)
Tentative settlement reached in defective plumbing lawsuit) (10-24-2008

Archive of Sun politics stories

Carson City — Assembly Bill 215 was proposed as a way to allow homeowners and their attorneys to sue contractors over construction defects, even if contractors go bankrupt. This week, according to its critics, the bill morphed into something else — leverage for trial lawyers to gain the upper hand in an ongoing fight over construction defect law.

No two groups have been more at odds this session than the trial attorneys and subcontractors, general contractors and homebuilders, as they battle over proposed changes in the state’s construction defect statutes.

Trial attorneys have close ties to Assembly Democrats, while the building groups have found a sympathetic ear in the Senate.

The conflict is now shining a light on end-of-the-session strategy, as lawmakers’ public deliberations give way to hard-edge tactics. Bills that pass one house, favoring one group’s interests, are countered with bills that pass out of the other house, favoring the other group. Proposed legislation can be held “hostage” until targeted bills pass or die.

Smarting over construction defect reform passed by the Senate 19-1 last week, the trial attorneys, who want the Senate’s proposed reform killed, appeared to need leverage.

Whether written for that purpose or not, the new version of AB215 gives the attorneys a bill the construction industry will have to fight.

Passed unanimously late Monday by the Assembly, the amended bill would require all licensed contractors to carry liability insurance.

Assembly Majority Leader John Oceguera, D-Las Vegas, called it a victory for owners of shoddily built homes who are trying to get them fixed.

Gary Milliken, who represents the Associated General Contractors, called it “a bargaining chip.”

Scott Canepa, a prominent construction defect lawyer, said the Nevada Justice Association, formerly known as the Nevada Trial Lawyers Association, was “deeply disappointed” that the Senate passed out the construction defect law. While he supports the new language in AB215, he denied it was related to the construction defect legislation.

“That’s sheer fantasy,” he said. “We could have asked the Assembly for a lot of things to give us leverage. We don’t want to play the game that way.”

The primary complaint of those who represent the construction industry is that they say it wasn’t properly vetted and they have not had time to fully explore the new language’s impact.

The bill would require contractors to carry between $300,000 and $3 million worth of insurance, depending on the size of the contract.

“We’re still trying to understand what it does to us,” said Josh Griffin, a lobbyist who represents the Nevada Subcontractors Association. “We think this establishes an incredibly high threshold, an incredibly expensive standard.”

Jim Wadhams, a veteran lobbyist who represents the Southern Nevada Homebuilders Association, said, “As far as I know, no one knew about it. My client became aware of it for the first time when the amendment was added on the floor.”

But Oceguera, who authored the original bill, and Assistant Majority Leader Marcus Conklin, D-Las Vegas, chairman of the Assembly Commerce and Labor Committee, defended the amended bill.

Oceguera said that during hearings in March, he expressed concern that homeowners with construction defects are finding companies have gone bankrupt and there’s no one to turn to.

The Nevada State Contractors Board testified that contractors could be required to carry liability insurance.

“People are being defrauded, and there’s no place for them to turn to,” Oceguera said. “This closes that loophole.”

He pointed out that the bill was amended in the committee nearly two weeks ago.

“It passed out of committee on April 10 and they couldn’t figure that out?” Oceguera said.

Discussion: 3 comments so far…

By wedontneednostinkingcodes

4/23/09 at 5:58 p.m.

Suggest removal

you guys are a joke...so you have to have insurance for a car in case you hurt something/one, but you don't have to have insurance when you're installing the electrical system in someones home, or the plumbing system, or installing the roof or the windows, or preparing the soil. of course not. you want to build far enough to get to 'substantial completion', demand full payment and then be immune from being held accountable for shoddy work. classic vegas.
By LV1Team

4/24/09 at 3:43 p.m.

Suggest removal

Was not really a Score..... It was a set up read the article. The Majority Leader is Best Friends with Mr. Canepa. He just slipped in a silly floor amendment at last minute and got the whole floor to trust him on it. He spent a lot of gun powder on that one. His Republican counterparts blew it for trusting him in the first place. OK with that being said:

Some of this bill is good business. If the Contractors Board has the power to verify that every contractor has insurance it is a good thing. The issue becomes the little business will have to go out of business because they will not be able to afford to pay for what it costs. Don't forget Mr. Canepa and his buds have driven the cost of Insurance through the roof! The breakdown that Mr. Oceguera (aka Mr. Canepa) uses is not completely intellectually honest. How can a small guy who may have a larger bid limit whom does hardly any work but may employ two or three folks which are jobs Nevadan's can not afford to loose afford this insurance?

Ok the Three Million occurrence over Three Million dollar aggregate is not even available in any state. Bigger yet it's Mr. Oceguera (aka Mr. Canepa) creating a bigger pot of money when he gets a Chapter 40 lawsuit and or a Product Liability claim. Also creates bigger loopholes in the laws to allow the NTLA to take mo money from the construction industry" Wow - Again it's not about the Homeowner but - Its All About The Money.

Shame on you Assembly Majority Leader. Your buddy and his Villa's and Planes are worth more to you than the great people of Nevada who elected you. It's catching up and you should stop doing all of us such injustice. Shame Shame Shame!!!!
By mcmc_john

4/27/09 at 9:14 a.m.

Suggest removal

LV1Team

It is not like you to miss the target three times in one article.

Your idea that the lawyers are making the insurance cost go through the roof is pure fantasy by you and is your first mistake. What is making the cost go through the roof is poor quality work. It is that simple. "Build it right and the lawyers won't come"

Let me help you out on the second incorrect statement you made in your comments. The price of general liability insurance in the residential home building industry rose 3% of the cost of a home between 2002 and 2006, while the price of the home rose 70% during the same period. So, how can anyone say it was a prime reason homes prices escalated... it just sounds good for the builders to say anything to get everyone to blame the insurance increase of 3% instead of the builders profits increase of over 67%... besides they don't want to look like they are to blame for exorbitant increase in home prices that took this market down.

The third point for you to understand is that the cost of insurance for a new contractor of any size is less than an existing contractor. The insurance industry quotes the price of insurance using two numbers. The first is how much insurance do you want and how long have you been in business. The longer you are in business the greater the risk is to the insurance carriers. So a new contractor has very little to no long term liability on their books so their premiums are always lower. So this law will not keep new business away from work.

You keep talking about the homeowners ... and how it is all about the money for the lawyers ...but you never talk about the money for the builders and subcontractors when they fail to build to code.

A subcontractor who fails to follow one code requirement can save a minimum of $40.00 per violations. Take one violation per home and times that number by 2,000 homes per year the contractor does, and then multiply that by 8 years of construction and you get over a $1,000,000 dollars in savings and interest.

The average home built between 2002 and 2006 has 12 violations per home... the cost to repair those violations is about $3,000 per home. Times that by the number of homes built in that same period and you have (100,000 homes by $3,000 repair cost) $300,000.000 million in repairs ... who do you think should pay for these repairs...?

You are right LV1Team about one thing "it is all about the money..."

« Previous Ten Next Ten »

Live chat: Tuesday, noon PST; Chat with Krista Creelman; Problem Gambling Center executive director Krista Creelman will answer questions about gambling addiction from Las Vegas Sun readers from noon to 1 p.m. Tuesday, Nov. ... Submit question