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Actually we just collected on that scenario. Deposit made, no work done and the bond paid.
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<div id="divRplyFwdMsg" dir="ltr"><font face="Calibri, sans-serif" style="font-size:11pt" color="#000000"><b>From:</b> wsbarp-bounces@lists.wsbarppt.com <wsbarp-bounces@lists.wsbarppt.com> on behalf of scott@scottgthomaslaw.com <scott@scottgthomaslaw.com><br>
<b>Sent:</b> Friday, December 10, 2021 1:44:12 PM<br>
<b>To:</b> 'WSBA Real Property Listserv' <wsbarp@lists.wsbarppt.com><br>
<b>Subject:</b> Re: [WSBARP] Contractor bond question</font>
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<p class="x_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.</p>
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<p class="x_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</p>
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<h3 style="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.</span></h3>
<h3 style="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.</span></h3>
<h3 style="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></span></h3>
<h3 style="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.</span></h3>
<p class="x_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.</span></p>
<p class="x_MsoNormal" style="text-indent:.5in; background:white"><span style="font-size:12.0pt; font-family:"Open Sans",sans-serif; color:black; background: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"></span></p>
<p class="x_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;</span></p>
<p class="x_MsoNormal" style="text-indent:.5in; background:white"><span style="font-size:12.0pt; font-family:"Open Sans",sans-serif; color:black; background: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">…</span></p>
<p class="x_MsoNormal" style="text-indent:.5in; background:white"><span style="font-size:12.0pt; font-family:"Open Sans",sans-serif; color:black"> </span></p>
<h3 style="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></span></h3>
<h3 style="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.</span></h3>
<p class="x_MsoNormal" style="text-indent:.5in; background:white"><span style="font-size:12.0pt; font-family:"Open Sans",sans-serif; color:black; background: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"></span></p>
<p class="x_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;</span></p>
<p class="x_MsoNormal" style="text-indent:.5in; background:white"><span style="font-size:12.0pt; font-family:"Open Sans",sans-serif; color:black; background: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"></span></p>
<p class="x_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;</span></p>
<p class="x_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</span></p>
<p class="x_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.</span></p>
<p class="x_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.</span></p>
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<p class="x_MsoNormal"><b><span style="font-size:10.0pt; font-family:"Calibri Light",sans-serif; color:gray">Stephen DeShazo</span></b></p>
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<p class="x_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></p>
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<p class="x_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</p>
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<p class="x_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).</p>
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<p class="x_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.</p>
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<p class="x_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"></span></p>
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<p class="x_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</span></p>
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<p class="x_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?
</p>
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<p class="x_MsoNormal"><b>B. Craig Gourley</b></p>
<p class="x_MsoNormal"><b>GOURLEY LAW GROUP</b></p>
<p class="x_MsoNormal"><b>THE EXCHANGE CONNECTION</b></p>
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