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</o:shapelayout></xml><![endif]--></head><body lang=EN-US link="#0563C1" vlink="#954F72" style='word-wrap:break-word'><div class=WordSection1><p class=MsoNormal>It’s not entirely clear to me that paying money in advance to a contractor who then immediately drives his or her backhoe off into the night would trigger the surety’s obligations under 18.27.040.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><div><div style='border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in'><p class=MsoNormal><b>From:</b> wsbarp-bounces@lists.wsbarppt.com <wsbarp-bounces@lists.wsbarppt.com> <b>On Behalf Of </b>Steve DeShazo<br><b>Sent:</b> Friday, December 10, 2021 12:36 PM<br><b>To:</b> WSBA Real Property Listserv <wsbarp@lists.wsbarppt.com><br><b>Subject:</b> Re: [WSBARP] Contractor bond question<o:p></o:p></p></div></div><p class=MsoNormal><o:p> </o:p></p><h3 style='mso-margin-top-alt:3.75pt;margin-right:0in;margin-bottom:7.5pt;margin-left:0in;background:white'><span style='font-size:11.0pt;color:black;font-weight:normal'>I came to a different conclusion than Ms. Fordham.</span><span style='color:black'> </span><span style='font-size:11.0pt;color:black;font-weight:normal'>I think the bond still provides coverage, or is at least meant to, but it’s usually only $12k. You can look up any contractor’s bond status on the <a href="https://secure.lni.wa.gov/verify/">Labor & Industries website</a>. It’ll show any claims against the contractor’s bond and provide a phone number for an L&I rep you can call. It will also list the bond party and a bond number, so you can call the insurance company and ask about a specific policy.<o:p></o:p></span></h3><h3 style='mso-margin-top-alt:3.75pt;margin-right:0in;margin-bottom:7.5pt;margin-left:0in;background:white'><span style='font-size:11.0pt;color:black;font-weight:normal'>The “surety insurer” should still hold the policy until cancelled. RCW 18.27.040(3) spells out the process for filing a claim against a contractor’s bond (superior court, surety issuer of the bond shall be named as a party). The excerpts below highlight some of the violations. 18.27.005 says the chapter shall be strictly enforced.<o:p></o:p></span></h3><h3 style='mso-margin-top-alt:3.75pt;margin-right:0in;margin-bottom:7.5pt;margin-left:0in;background:white'><span style='font-family:"Open Sans",sans-serif;color:black'>RCW <a href="http://app.leg.wa.gov/RCW/default.aspx?cite=18.27.020">18.27.020</a><o:p></o:p></span></h3><h3 style='mso-margin-top-alt:3.75pt;margin-right:0in;margin-bottom:7.5pt;margin-left:0in;background:white;box-sizing: border-box'><span style='font-family:"Open Sans",sans-serif;color:black'>Registration required</span><span style='font-family:"Times New Roman",serif;color:black'>—</span><span style='font-family:"Open Sans",sans-serif;color:black'>Prohibited acts</span><span style='font-family:"Times New Roman",serif;color:black'>—</span><span style='font-family:"Open Sans",sans-serif;color:black'>Criminal penalty</span><span style='font-family:"Times New Roman",serif;color:black'>—</span><span style='font-family:"Open Sans",sans-serif;color:black'>Monitoring program.<o:p></o:p></span></h3><p class=MsoNormal style='text-indent:.5in;background:white'><span style='font-size:12.0pt;font-family:"Open Sans",sans-serif;color:black'>(1) Every contractor shall register with the department.<o:p></o:p></span></p><p class=MsoNormal style='text-indent:.5in;background:white'><span style='font-size:12.0pt;font-family:"Open Sans",sans-serif;color:black;background:yellow;mso-highlight:yellow'>(2) It is a gross misdemeanor for any contractor to:</span><span style='font-size:12.0pt;font-family:"Open Sans",sans-serif;color:black'><o:p></o:p></span></p><p class=MsoNormal style='text-indent:.5in;background:white'><span style='font-size:12.0pt;font-family:"Open Sans",sans-serif;color:black'>(a) Advertise, offer to do work, submit a bid, or perform any work as a contractor without being registered as required by this chapter;<o:p></o:p></span></p><p class=MsoNormal style='text-indent:.5in;background:white'><span style='font-size:12.0pt;font-family:"Open Sans",sans-serif;color:black;background:yellow;mso-highlight:yellow'>(b) Advertise, offer to do work, submit a bid, or perform any work as a contractor when the contractor's registration is suspended or revoked</span><span style='font-size:12.0pt;font-family:"Open Sans",sans-serif;color:black'>…<o:p></o:p></span></p><p class=MsoNormal style='text-indent:.5in;background:white'><span style='font-size:12.0pt;font-family:"Open Sans",sans-serif;color:black'><o:p> </o:p></span></p><h3 style='mso-margin-top-alt:3.75pt;margin-right:0in;margin-bottom:7.5pt;margin-left:0in;background:white'><span style='font-family:"Open Sans",sans-serif;color:black'>RCW <a href="http://app.leg.wa.gov/RCW/default.aspx?cite=18.27.200"><span style='color:#2B674D'>18.27.200</span></a><o:p></o:p></span></h3><h3 style='mso-margin-top-alt:3.75pt;margin-right:0in;margin-bottom:7.5pt;margin-left:0in;background:white;box-sizing: border-box'><span style='font-family:"Open Sans",sans-serif;color:black'>Violation</span><span style='font-family:"Times New Roman",serif;color:black'>—</span><span style='font-family:"Open Sans",sans-serif;color:black'>Infraction.<o:p></o:p></span></h3><p class=MsoNormal style='text-indent:.5in;background:white'><span style='font-size:12.0pt;font-family:"Open Sans",sans-serif;color:black;background:yellow;mso-highlight:yellow'>(1) It is a violation of this chapter and an infraction for any contractor to:</span><span style='font-size:12.0pt;font-family:"Open Sans",sans-serif;color:black'><o:p></o:p></span></p><p class=MsoNormal style='text-indent:.5in;background:white'><span style='font-size:12.0pt;font-family:"Open Sans",sans-serif;color:black'>(a) Advertise, offer to do work, submit a bid, or perform any work as a contractor without being registered as required by this chapter;<o:p></o:p></span></p><p class=MsoNormal style='text-indent:.5in;background:white'><span style='font-size:12.0pt;font-family:"Open Sans",sans-serif;color:black;background:yellow;mso-highlight:yellow'>(b) Advertise, offer to do work, submit a bid, or perform any work as a contractor when the contractor's registration is suspended or revoked;</span><span style='font-size:12.0pt;font-family:"Open Sans",sans-serif;color:black'><o:p></o:p></span></p><p class=MsoNormal style='text-indent:.5in;background:white'><span style='font-size:12.0pt;font-family:"Open Sans",sans-serif;color:black'>(c) Transfer a valid registration to an unregistered contractor or allow an unregistered contractor to work under a registration issued to another contractor;<o:p></o:p></span></p><p class=MsoNormal style='text-indent:.5in;background:white'><span style='font-size:12.0pt;font-family:"Open Sans",sans-serif;color:black'>(d) If the contractor is a [plumbing] contractor as defined in RCW <a href="http://app.leg.wa.gov/RCW/default.aspx?cite=18.106.010"><b><span style='color:#2B674D'>18.106.010</span></b></a>, violate RCW <a href="http://app.leg.wa.gov/RCW/default.aspx?cite=18.106.320"><b><span style='color:#2B674D'>18.106.320</span></b></a>; or<o:p></o:p></span></p><p class=MsoNormal style='text-indent:.5in;background:white'><span style='font-size:12.0pt;font-family:"Open Sans",sans-serif;color:black'>(e) Subcontract to, or use, an unregistered contractor.<o:p></o:p></span></p><p class=MsoNormal style='text-indent:.5in;background:white'><span style='font-size:12.0pt;font-family:"Open Sans",sans-serif;color:black'>(2) Each day that a contractor works without being registered as required by this chapter, works while the contractor's registration is suspended or revoked, or works under a registration issued to another contractor is a separate infraction. Each worksite at which a contractor works without being registered as required by this chapter, works while the contractor's registration is suspended or revoked, or works under a registration issued to another contractor is a separate infraction.<o:p></o:p></span></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Calibri Light",sans-serif;color:gray'>Stephen DeShazo</span></b><o:p></o:p></p><p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Calibri Light",sans-serif;color:#767171'>In-House Counsel</span></b><o:p></o:p></p><p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Calibri Light",sans-serif;color:#404040'>Direct:</span></b><b><span style='font-size:10.0pt;font-family:"Calibri Light",sans-serif;color:#548235'> </span></b><span style='font-size:10.0pt;font-family:"Calibri Light",sans-serif;color:#548235'> </span><b><span style='font-size:10.0pt;font-family:"Calibri Light",sans-serif;color:gray'>206.413.6359</span></b><o:p></o:p></p><p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Calibri Light",sans-serif;color:#404040'>Office:</span></b><b><span style='font-size:10.0pt;font-family:"Calibri Light",sans-serif;color:#548235'> </span></b><span style='font-size:10.0pt;font-family:"Calibri Light",sans-serif;color:#548235'> </span><b><span style='font-size:10.0pt;font-family:"Calibri Light",sans-serif;color:gray'>206.737.9700</span></b><o:p></o:p></p><p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Calibri Light",sans-serif;color:#404040'>Fax:</span></b><span style='font-size:10.0pt;font-family:"Calibri Light",sans-serif;color:#548235'> </span><b><span style='font-size:10.0pt;font-family:"Calibri Light",sans-serif;color:gray'>206.260.1339</span></b><o:p></o:p></p><p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Calibri Light",sans-serif;color:#404040'>Email</span></b><b><span style='font-size:10.0pt;font-family:"Calibri Light",sans-serif;color:black'>: </span></b><span style='font-size:10.0pt;font-family:"Calibri Light",sans-serif'><a href="mailto:steve.deshazo@isolahomes.com">steve.deshazo@isolahomes.com</a> </span><o:p></o:p></p><p class=MsoNormal><span style='color:black'><img border=0 width=63 height=63 style='width:.6597in;height:.6597in' id="Picture_x0020_3" src="cid:image001.png@01D7EDCC.03A27A10" alt="Isola Logo Final_Pantone_Medium Size"><img border=0 width=164 height=63 style='width:1.7083in;height:.6597in' id="Picture_x0020_2" src="cid:image002.png@01D7EDCC.03A27A10" alt="NWBF_Logo_TM"></span><o:p></o:p></p><p class=MsoNormal><b><span style='font-size:7.0pt;font-family:"Arial",sans-serif;color:#6D6E71'>CONFIDENTIALITY NOTICE<br></span></b><span style='font-size:7.0pt;font-family:"Georgia",serif;color:#6D6E71'>This e-mail and any attachments are for the sole use of the intended recipients and contain information that may be confidential or legally privileged. If you have received this e-mail in error, please notify the sender by reply e-mail and delete the message.</span><o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><div><div style='border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in'><p class=MsoNormal><b>From:</b> <a href="mailto:wsbarp-bounces@lists.wsbarppt.com">wsbarp-bounces@lists.wsbarppt.com</a> <<a href="mailto:wsbarp-bounces@lists.wsbarppt.com">wsbarp-bounces@lists.wsbarppt.com</a>> <b>On Behalf Of </b>Inge Fordham<br><b>Sent:</b> Friday, December 10, 2021 12:23 PM<br><b>To:</b> WSBA Real Property Listserv <<a href="mailto:wsbarp@lists.wsbarppt.com">wsbarp@lists.wsbarppt.com</a>><br><b>Subject:</b> Re: [WSBARP] Contractor bond question<o:p></o:p></p></div></div><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>The bond wouldn’t be triggered absent an occurrence during the bond period. It sounds like the client may be out of luck with respect to the bond. Unfortunately, even if the contractor was insured, the CGL policy wouldn’t provide coverage absent property damage caused by an occurrence within the policy period. It wouldn’t provide coverage for theft (or conversion) of funds. It may still be worth going after the contractor to obtain a judgment as they are good for 10 years and can be renewed for 10 year periods thereafter. If the contractor owns real property, you can record a judgment lien. If the client proceeds with a lawsuit, I would also plead fraud as a fraud judgment cannot be discharged in bankruptcy (but a judgment for a general breach of contract or conversion could).<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>Best of luck! I always feel horrible for clients in this scenario. It’s so important to verify licensure, bond, and insurance when hiring a contractor. But then hindsight is always 20/20.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><div><div><table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 style='border-collapse:collapse'><tr><td width=60 valign=top style='width:45.0pt;padding:0in 5.4pt 0in 5.4pt'><p class=MsoNormal align=center style='text-align:center'><span style='font-size:10.0pt;font-family:"Times",serif;color:black'><img border=0 width=96 height=95 style='width:1.0in;height:.993in' id="Picture_x0020_1" src="cid:image003.png@01D7EDCC.03A27A10" alt="uc%3fexport=download&id=1W3rEcChy0_E0cCfV5up02mkhwnL6eWIs&revid=0B4P5JoIHdbFaR29EbHlRWHFseFV5STZpSUVGeUNPWldkVDFVPQ"></span><span style='font-size:12.0pt'><o:p></o:p></span></p></td><td width=570 valign=top style='width:427.25pt;padding:0in 5.4pt 0in 5.4pt'><p class=MsoNormal style='margin-bottom:3.0pt'><b><span style='font-size:13.0pt;font-family:"Cambria",serif;color:#203864'>Inge A. Fordham | Attorney</span></b><span style='font-size:12.0pt'><o:p></o:p></span></p><p class=MsoNormal style='margin-bottom:3.0pt'><span style='font-size:12.0pt;font-family:"Cambria",serif;color:black'>Fordham Law, PLLC</span><span style='font-size:12.0pt'><o:p></o:p></span></p><p class=MsoNormal style='margin-bottom:3.0pt'><span style='font-size:12.0pt;font-family:"Cambria",serif;color:black'>3218 Sixth Avenue | Tacoma, WA 98406</span><span style='font-size:12.0pt'><o:p></o:p></span></p><p class=MsoNormal style='margin-bottom:3.0pt'><span style='font-size:12.0pt;font-family:"Cambria",serif;color:black'>Office: (253) 348-2657 | Mobile: (206) 778-3131</span><span style='font-size:12.0pt'><o:p></o:p></span></p><p class=MsoNormal style='margin-bottom:3.0pt'><span style='font-size:12.0pt;font-family:"Cambria",serif;color:black'><a href="http://www.fordhamlegal.com">www.fordhamlegal.com</a></span><span style='font-size:12.0pt'><o:p></o:p></span></p></td></tr></table><p class=MsoNormal><span style='font-size:9.0pt;color:black'> </span><span style='font-size:12.0pt;color:black'><o:p></o:p></span></p><p class=MsoNormal><b><span style='font-size:8.0pt;font-family:"Cambria",serif;color:#7D888E'>Confidential Communication:</span></b><span style='font-size:8.0pt;font-family:"Cambria",serif;color:#7D888E'> This email is sent to a recipient on behalf of an attorney/law firm, and is information intended exclusively for the individual, entity or company to which it is sent. This communication may contain proprietary, privileged or confidential information or may otherwise be legally exempt from disclosure other than to the intended recipient. If you are not the named addressee, you are not authorized to read, print, retain, copy or otherwise disseminate this message or any part of it. If you have received this email in error, please notify the sender immediately by email or other communication and delete all copies of the message.</span><o:p></o:p></p></div></div><p class=MsoNormal><o:p> </o:p></p><div style='border:none;border-top:solid #B5C4DF 1.0pt;padding:3.0pt 0in 0in 0in'><p class=MsoNormal><b><span style='font-size:12.0pt;color:black'>From: </span></b><span style='font-size:12.0pt;color:black'><<a href="mailto:wsbarp-bounces@lists.wsbarppt.com">wsbarp-bounces@lists.wsbarppt.com</a>> on behalf of Craig Gourley <<a href="mailto:craig@glgmail.com">craig@glgmail.com</a>><br><b>Reply-To: </b>WSBA Real Property Listserv <<a href="mailto:wsbarp@lists.wsbarppt.com">wsbarp@lists.wsbarppt.com</a>><br><b>Date: </b>Friday, December 10, 2021 at 12:13 PM<br><b>To: </b>WSBA Real Property Listserv <<a href="mailto:wsbarp@lists.wsbarppt.com">wsbarp@lists.wsbarppt.com</a>><br><b>Subject: </b>[WSBARP] Contractor bond question<o:p></o:p></span></p></div><div><p class=MsoNormal><o:p> </o:p></p></div><p class=MsoNormal>Construction bond gurus. I have a client with a contractor bond question that I hope someone has addressed previously and can share the knowledge. Hapless homeowner hires sneaky contractor for a remodel. Hapless pays the contractor in advance. Contractor works a couple of days and disappears. Hapless would like to go after the bond. So far a common and predictable outcome. Now the fun part. Contractor was suspended by L&I in April. Contract was signed on June 8 for work to start June 16. Bond expired on June 13<sup>th</sup>. Nutshell, unlicensed contractor signs a contract while the bond is in effect but starts work after it expired. Any bond coverage? Why does this feel like a bar question? <o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><b>B. Craig Gourley<o:p></o:p></b></p><p class=MsoNormal><b>GOURLEY LAW GROUP</b><o:p></o:p></p><p class=MsoNormal><b>THE EXCHANGE CONNECTION</b><o:p></o:p></p><p class=MsoNormal><b>SNOHOMISH ESCROW </b><o:p></o:p></p><p class=MsoNormal>P.O. Box 1091<o:p></o:p></p><p class=MsoNormal>Snohomish, WA 98291<o:p></o:p></p><p class=MsoNormal>PH: (360) 568-5065 (800) 291-8401<o:p></o:p></p><p class=MsoNormal>Fax: (360) 568-8092 <o:p></o:p></p><p class=MsoNormal> <o:p></o:p></p><p class=MsoNormal><span style='font-size:10.0pt'>CONFIDENTIALITY NOTICE: This electronic mail transmission may contain legally privileged, confidential information belonging to the sender. The information is intended only for the use of the individual or entity named above. If you are not the intended recipient, you are hereby notified that any disclosure, copying, distribution or taking any action based on the contents of this electronic mail is strictly prohibited. If you have received this electronic mail in error, please contact sender and delete all copies</span>.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p></div></body></html>