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A Closer Look at Senate Bill 349: Proposed Amendments to NRS Chapter 40

Nevada construction defect claims are governed by Nevada Revised Statutes ("NRS") 40.600 - 40.695, which is commonly referred to as "Chapter 40." Chapter 40 first became law in 1995. The original stated goal of Chapter 40 was to provide a pre-litigation process to allow construction defect claims the opportunity to settle without incurring the costs associated with litigation. However, since its inception, the Chapter 40 pre-litigation process has faced harsh criticism due in large part to its ineffectiveness to settle construction defect claims in a cost effective manner. During the 2003 legislative session the statute was significantly modified. The 2003 amendments gave contractors "the right to repair" allegedly defective work prior to allowing a homeowner claimant to institute litigation proceedings. Currently, there is considerable debate among those involved in the construction industry, consumer advocates and Nevada lawmakers regarding the need for additional amendments to Chapter 40. During the 2009 legislative session, the Senate Judicial Committee proposed Senate Bill ("SB") 349. This controversial bill seeks to amend three sections of Chapter 40 as set forth below.

"Per Home" SIRs or Deductibles in Multi-Home Construction Defect Lawsuits

A recent Court of Appeals decision refused to interpret a $25,000 per claim (Self Insured Retention) as applying to each home in a multi-home construction defect lawsuit because the policy language did not unambiguously inform the insured that the SIR would be applied on a per-home basis. Clarendon American Insurance Company v. North American Capacity Insurance Company (2010) 186 Cal.App.4th 556.

Real Estate Recovery Fund: Another Source for Recovery

Whether it's a shopping center, office building or a house, some real estate brokers and agents have regrettably resorted to fraud in order to make a sale and earn a quick commission. In one example, a broker, in order to complete a difficult sale, told the buyer of a house that the roof was new, and therefore the buyer did not have to worry about leaks. This misrepresentation was made despite the seller telling the broker that the roof was several years old and had leaked before. After the buyer moved in, the roof leaked and caused significant damage to the buyer's belongings. After the buyer obtained a $20,000 judgment for fraud against the broker, the buyer could not collect anything since the broker had no assets. The broker's insurance company denied coverage since the judgment was based on fraud.

An RMO/RME's Failures May Result in the Loss of a License for Litigation Purposes

Kring & Chung works with a number of contractors that are corporations and limited liability companies holding their licenses through a Registered Managing Employee and/or Registered Managing Officer, which are commonly referred to as RMO/RME. According to Business & Professions Code § 7068.1, the license holder:

When Can a Plaintiff Recover Future Replacement Cost Damages in a Breach of Warranty Case?

Those who practice tort law routinely allege claims for future damages for, i.e., medical expenses or pain and suffering. But when can a plaintiff in a commercial case recover future damages? The issue is especially tricky in the context of breach of warranty claims.

The Accepted Work Doctrine - Dangerous Conditions Created by Contractors Do Not Necessarily Create Liability to Third Parties

Contractors need to be aware of The Accepted Work Doctrine in California. What is it? This doctrine provides that a contractor who builds according to an owner's plans and specifications will not be liable to third parties for injuries sustained by reason of a dangerous condition of their work.

State Supreme Court Interprets FEHA to Parallel the ADA

Under a recent California Supreme Court decision, the state Fair Employment and Housing Act now requires an individual alleging disability discrimination to establish that they are able to perform their job's essential duties before they can prevail in a lawsuit for discrimination. This case puts California law in line with federal law under the American's with Disabilities Act. California employers will be pleased that an employee alleging disability discrimination now has the burden of proof to establish that they can perform their position's essential duties.

Meal & Rest Pay - Murphy v. Kenneth Cole Productions

In the most important Employment Law case of the year, the California Supreme Court recently held that the "additional hour of pay" for employees missing meal and break periods is a wage and not a penalty, thus falling under the three-year statute of limitations instead of the one-year statute of limitations.

California Appellate Court Imposes Federal Standard of "Extreme Care" Upon Commercial Vehicles Operating in Hazardous Conditions

In the recent case of Weaver v. Chavez, 133 Cal. App. 4th 1350, the Second Appellate District of California found that a Plaintiff alleging personal injuries as a result of an accident with a commercial vehicle traveling in hazardous weather conditions was entitled to a jury instruction requiring "extreme care" on the commercial driver's part, rather than merely "reasonable prudence" as is generally used in California's jury instructions.

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