a:\newslw.96 [4]Alan Lee MitchellStephen De'ak202002-07-03T22:49:00Z2006-07-01T22:30:00Z2006-07-01T22:30:00Z111366476 5315759711.8026

Scott Hookland LLPConsider . . .VOL. 11, ISSUE 3 July, 2002Law OfficesSCOTT HOOKLAND LLP9185 SW BURNHAM ST. POST OFFICE BOX 23414TIGARD, OR 97223 TIGARD, OR 97281(503) 620-4540 -- (800) 334-8986 -- FAX: (503) 620-4315www.scott-hookland.com

UPDATE ON CCB “RMI” RULES

Contractors who have been licensed for many years may remember when the CCB enforced certain rules about a company’s “responsible managing individual” (RMI). While the CCB stopped enfo

rcing those rules some years back, it has recently begun enforcing new rules about RMIs.

Any contractor that first obtains its license after July 1, 2000 must designate one person as its RMI. That person must complete the 16-hour education requirement and

pass the CCB licensing test. Contractors who were licensed prior to July 1, 2000 and whose license has not lapsed for more than a two-year period do not need to meet the education requirement. Thus, the RMI rules do not apply to those contractors.

The CC

B generally expects the RMI to be either the sole proprietor, an officer of a corporation or a member of an LLC. There is a provision for an employee to be a company’s RMI (known as a “designated RMI”). This requires that the employee be the only person wi

thin the company who directs the company’s entire

Oregon

operations.

If the RMI leaves the company, then the company must immediately appoint a new RMI and notify the CCB of the new RMI. Companies that fail to timely obtain a new RMI may receive a license

suspension notice from the CCB.

As noted above, companies that have been continuously licensed since prior to July 1, 2000 do not need to designate an RMI. What happens if all of the company’s owners who were listed with the CCB as of July 1, 2000 leave

the company? In that situation, the CCB will notify the company that it must immediately appoint a qualified RMI, or risk suspension of its CCB license. For these companies, prior planning is important.

The bottom line is that every contractor needs to be

aware of these RMI rules and how they impact the contractor’s CCB license.

GOT EIFS?Exterior Insulation and Finish Systems (EIFS) are much in the news today. Lawsuits are being filed almost daily. Insurance companies are either reducing or downright eliminating coverage for EIFS and mold issues.Now, some of the major manufacturers are working toward settlement agreements in class action lawsuits that could affect millions of homes that have EIFS stucco. The most recent company to attempt this resolution is Dryvit Systems, one of the larger manufacturers of EIFS.In a class action lawsuit filed in Tennessee, the court is considering a settlement agreement that would bind all owners of one- or two-family residences whose homes had Dryvit EIFS installed after January 1, 1989. These homeowners will be bound by this settlement no matter what state they live in, unless they “opt out” of the settlement. This proposed settlement agreement does not apply to commercial properties or EIFS installed over masonry substrates.The deadline for homeowners to opt out of the settlement is September 3, 2002. If homeowners do not opt out by that date, they would be bound by the terms of the settlement agreement. The Tennessee judge will review those terms on October 1, 2002 and decide if they are acceptable.In general, the proposed settlement agreement would pay for no more than 50% of the homeowner’s repair costs up to a maximum of $7,500. The homeowner would then receive a three-year limited warranty against further water leaks. At this time, the proposed settlement fund would have a total of about $7 million in funding.To find out more about the proposed Dryvit settlement, go to www.stuccosettlement.com.Note that this is the second major manufacturer to look at a class action settlement. In April of 1998, the manufacturers of Senergy brand EIFS entered a class action settlement. It appears that both the “opt out” period and the period within which to make a claim have both expired under the terms of that settlement agreement. For more information on the Senergy class action settlement, go to www.kinsella.com/eifs.In addition, there are many, many web pages devoted to EIFS issues. For a selection, type “class action” and EIFS into your favorite search engine (google.com is a good one).

DIDN’T PAY YOUR TAXES OR CHILD SUPPORT?–YOU MAY LOSE YOUR LICENSELicensed contractors who fail to pay either their income tax obligations or child support obligations may find they no longer have a license.As for income taxes, the Department of Revenue can notify both the taxpayer and the licensing agency (for example, the CCB) of the delinquent tax obligation. Upon receipt of that notice, the CCB “shall refuse to reissue, renew or extend any license.” ORS 305.385(4)(b). Also, after notice from the agency and an opportunity for a hearing, the CCB “shall suspend the person’s license” if it determines that certain facts exist.As for child support obligations, the Department of Justice can give a similar notice to a person who is subject to a support enforcement order and is not in compliance with that order. ORS 25.750. If the person fails to follow up with the Department of Justice, then that agency will notify the licensing agency to suspend the person’s professional license.In addition, a related statute allows the suspension of one license to lead to the suspension of any other license held by the person. ORS 25.771. Thus, for example, a plumber whose CCB license is suspended may also find his plumbing license may be suspended.All of these statutes require that the license holder be notified before any suspension can occur. These notices will be sent to the current addresses on file with the respective agencies. Thus, this is yet another reason to make sure that you inform all agencies of address changes.FIRM NEWS:DOUGLAS R. HOOKLAND co-presented a full-day seminar on June 11, 2002 in Portland for National Business Institute entitled “Debt Collection From Start to Finish in Oregon.” Mr. Hookland’s co-presenter was James Ray Streinz of McEwen Gisvold LLP.ALAN L. MITCHELL will present two half-day seminars for the Eugene chapter of the National Electrical Contractors Association. The first seminar was on July 9 and covered Oregon construction contract issues, including discussion of a sample construction bid. The second seminar will be on August 15 and will cover Oregon credit and collections issues.LEON A. FOSTER joins the firm as a law clerk.

Leon

has completed his second year of law school at the Lewis & Clark Law School and previously worked in litigation support.

GAYLE L. ALLEN was recently elected Director of Membership for the NALS of Oregon legal professionals’ association. Gayle has been with our office since 1987.RANDOM THOUGHTS:“A verbal contract isn’t worth the paper it’s printed on.” Samuel GoldwynThis newsletter is published quarterly by the law firm of Scott Hookland LLP for the benefit of its clients and friends and is intended to inform them about legal matters of interest. While this information is meant to be current, we do not promise or guarantee that the information is correct, complete or up-to-date. This information is not intended to and should not be considered to provide legal advice or create an attorney-client relationship. No action should be undertaken in reliance hereon without professional legal counsel.Alan L. Mitchell, Editor