HB 151: "An Act relating to claims and court actions for defects in the design, construction, and remodeling of certain dwellings; limiting when certain court actions may be brought; and amending Rules 79 and 82, Alaska Rules of Civil Procedure."
00 HOUSE BILL NO. 151 01 "An Act relating to claims and court actions for defects in the design, construction, and 02 remodeling of certain dwellings; limiting when certain court actions may be brought; 03 and amending Rules 79 and 82, Alaska Rules of Civil Procedure." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 08.18.081 is amended by adding a new subsection to read: 06 (c) If the claim for which a person may bring suit under (a) of this section is 07 subject to AS 09.45.881 - 09.45.899, the person may not bring suit unless the person 08 complies with AS 09.45.881 - 09.45.899. 09 * Sec. 2. AS 09.10 is amended by adding a new section to read: 10 Sec. 09.10.054. Certain design, construction, and remodeling actions to be 11 brought in one year. (a) For actions covered under AS 09.45.881 - 09.45.899, a 12 claimant may not begin an action against a construction professional unless the action 13 is begun within one year after the claimant discovers the defect that is the subject of 14 the action, except that the action may not be begun more than 10 years after
01 substantial completion of the dwelling. 02 (b) In this section, 03 (1) "action," "claim," "construction professional," and "dwelling" have 04 the meanings given in AS 09.45.899; 05 (2) "substantial completion" means the date when construction is 06 sufficiently completed to allow the owner of the dwelling or a person authorized by 07 the owner to use or occupy the improvement to the dwelling or to use the dwelling in 08 the manner for which it was intended. 09 * Sec. 3. AS 09.45 is amended by adding new sections to read: 10 Article 10A. Action for Dwelling Design, Construction, or Remodeling Claims. 11 Sec. 09.45.881. Notice of claim. (a) In an action brought on a claim against a 12 construction professional, the claimant shall, at least 90 days before filing the action, 13 serve written notice of the claim on the construction professional. 14 (b) The notice of the claim in (a) of this section must state that the claimant 15 asserts a claim against the construction professional for a defect in the design, 16 construction, or remodeling of a dwelling and must describe the claim in reasonable 17 detail sufficient to determine the general nature of the alleged defect and the results of 18 the defect if known. 19 (c) At the request of the construction professional, the claimant shall, if the 20 evidence is discoverable under the state's court rules of evidence, provide to the 21 construction professional any evidence that the claimant possesses that depicts the 22 nature and cause of the defect and the nature and extent of the repairs necessary to 23 repair the defect, including expert reports, photographs, and videotapes. 24 Sec. 09.45.882. Written response to notice of claim. (a) Within 21 days 25 after service of the notice under AS 09.45.881, the construction professional shall 26 serve a written response on the claimant. 27 (b) The written response under (a) of this section must state that the 28 construction professional 29 (1) offers to inspect the dwelling that is the subject of the claim within 30 a specified time to determine if the construction professional will offer to repair the 31 defect, will compromise and settle the claim by payment of money, or will dispute the
01 claim; 02 (2) offers to compromise and settle the claim by a payment of money 03 without inspection; or 04 (3) disputes the claim and will not repair the alleged defect or 05 compromise and settle the claim by a payment of money. 06 Sec. 09.45.883. Court action allowed if claim disputed or not responded 07 to. If the construction professional disputes the claim in the notice under 08 AS 09.45.882(b)(3) or does not respond to the claimant's notice of claim within the 09 time required by AS 09.45.882(a), the claimant may bring an action against the 10 construction professional for the claim described in the notice of the claim made under 11 AS 09.45.881 without further notice. 12 Sec. 09.45.884. Consequence of rejecting inspection or settlement offer. 13 (a) If the claimant rejects the inspection offer under AS 09.45.882(b)(1) or the 14 settlement offer under AS 09.45.882(b)(2), the claimant shall serve written notice of 15 the claimant's rejection on the construction professional. 16 (b) The notice under (a) of this section must include the basis for the 17 claimant's rejection of the construction professional's offer. 18 (c) After service of the rejection notice required by (a) of this section, the 19 claimant may bring an action against the construction professional for the claim 20 described in the notice of claim made under AS 09.45.881 without further notice. 21 Sec. 09.45.885. Consequence of accepting inspection offer. If a claimant 22 elects to allow the construction professional to make an inspection under 23 AS 09.45.882(b)(1), the claimant shall provide the construction professional and its 24 contractors or other agents reasonable access to the claimant's dwelling during normal 25 working hours to inspect the dwelling and the alleged defect to determine the nature 26 and cause of the alleged defect and the nature and extent of any repairs necessary to 27 repair the alleged defect. 28 Sec. 09.45.886. Procedure after inspection. Within 14 days after completion 29 of an inspection made under AS 09.45.885, the construction professional shall serve 30 on the claimant a written 31 (1) offer to repair the defect without charge to the claimant; the offer
01 must include a report of the scope of the inspection, the findings and results of the 02 inspection, a description of any repairs necessary to repair the defect, and a schedule 03 for the completion of the repairs; 04 (2) offer to compromise and settle the claim by a payment of money 05 under AS 09.45.882(b)(2); or 06 (3) statement that the construction professional will not repair the 07 defect. 08 Sec. 09.45.887. Court action allowed after failure to repair or to settle. If 09 the construction professional does not respond within the time required by 10 AS 09.45.886, does not repair the defect within the time agreed under 11 AS 09.45.886(1), does not provide an offer under AS 09.45.886(2), or serves a 12 statement under AS 09.45.886(3), the claimant may bring an action against the 13 construction professional for the claim described in the notice of claim without further 14 notice. 15 Sec. 09.45.888. Court action allowed if claimant rejects offer. (a) If the 16 claimant rejects an offer made by the construction professional under AS 09.45.886(1) 17 or (2), the claimant shall serve written notice of the claimant's rejection on the 18 construction professional that includes the basis for the claimant's rejection of the 19 construction professional's offer. 20 (b) After service of the notice under (a) of this section, the claimant may bring 21 an action against the construction professional for the claim described in the notice of 22 claim made under AS 09.45.881 without further notice. 23 Sec. 09.45.889. Unreasonable rejection of offer. (a) If a claimant 24 unreasonably rejects an offer made under AS 09.45.881 - 09.45.899 or does not give 25 the construction professional a reasonable opportunity to repair the defect under an 26 accepted offer of settlement, the claimant may not recover an amount that exceeds 27 (1) the reasonable cost of the repairs offered under AS 09.45.886(1) 28 that are necessary to cure the defect and that are the responsibility of the construction 29 professional; or 30 (2) the amount of a reasonable settlement offer of money that is made 31 under AS 09.45.886(2).
01 (b) If a claimant unreasonably rejects a construction professional's offer made 02 under AS 09.45.881 - 09.45.899 or does not give the construction professional a 03 reasonable opportunity to repair the defect under an accepted offer of settlement, the 04 court may deny the claimant an award of attorney fees and costs and may award 05 attorney fees and costs to the construction professional. 06 Sec. 09.45.890. Acceptance of offer. (a) To accept an offer of a construction 07 professional to repair a defect under AS 09.45.886(1), a claimant shall serve the 08 construction professional with a written notice of acceptance within a reasonable 09 period of time, not to exceed 30 days, after receiving the offer. 10 (b) A claimant who accepts an offer under (a) of this section shall provide the 11 construction professional and its contractors or other agents reasonable access to the 12 claimant's dwelling during normal working hours to perform the repairs by the time 13 stated in the offer. 14 Sec. 09.45.891. Presumption of mitigation. If a claimant fails to allow a 15 construction professional to make a reasonable inspection requested by the 16 construction professional under AS 09.45.882(b)(1), or fails to provide a good faith 17 written response to a construction professional's offer under AS 09.45.882(b)(2) or 18 09.45.886(2), the failure establishes a rebuttable presumption that the claimant's 19 damages could have been mitigated. 20 Sec. 09.45.892. Noncompliance assertion prohibited. Unless there is good 21 cause for the failure, a construction professional may not assert that the claimant did 22 not comply with AS 09.45.881 - 09.45.899 if the construction professional fails to 23 respond in good faith to the claimant's notice of claim made under AS 09.45.881. 24 Sec. 09.45.893. Notice required in contract. (a) In order to take advantage 25 of any rights of a construction professional under AS 09.45.881 - 09.45.899, when a 26 construction professional enters into a contract with another person to design, 27 construct, or remodel a dwelling, the construction professional shall give the person a 28 notice of the construction professional's right to offer to cure a defect before the 29 person may file an action in court against the construction professional. 30 (b) The notice required by (a) of this section may be included as part of the 31 contract, must be conspicuous, and must be in substantially the following form:
01 ALASKA LAW CONTAINS IMPORTANT 02 REQUIREMENTS THAT YOU MUST FOLLOW BEFORE YOU 03 MAY FILE A COURT ACTION FOR DEFECTIVE DESIGN, 04 CONSTRUCTION, OR REMODELING AGAINST THE DESIGNER, 05 BUILDER, OR REMODELER OF YOUR HOME. NINETY DAYS 06 BEFORE YOU FILE A COURT ACTION, YOU MUST DELIVER 07 TO THE DESIGNER, BUILDER, OR REMODELER A WRITTEN 08 NOTICE OF ANY DESIGN, CONSTRUCTION, OR REMODELING 09 CONDITIONS YOU ALLEGE ARE DEFECTIVE AND PROVIDE 10 YOUR DESIGNER, BUILDER, OR REMODELER WITH THE 11 OPPORTUNITY TO MAKE AN OFFER TO REPAIR OR PAY FOR 12 THE DEFECTS. YOU ARE NOT OBLIGATED TO ACCEPT ANY 13 OFFER MADE BY THE DESIGNER, BUILDER, OR REMODELER. 14 THERE ARE STRICT DEADLINES AND PROCEDURES UNDER 15 STATE LAW, AND FAILURE TO FOLLOW THEM MAY AFFECT 16 YOUR RIGHT TO FILE A COURT ACTION. 17 Sec. 09.45.894. Additional construction defects; additional notice of claim 18 required. A court action for a defect that is discovered after a claimant has provided a 19 construction professional with a notice of claim required in AS 09.45.881 - 09.45.899 20 may not be commenced until the claimant has complied with the provisions of 21 AS 09.45.881 - 09.45.899. 22 Sec. 09.45.895. Collateral sources. In an action under AS 09.45.881 - 23 09.45.899, a court shall deduct from the compensation awarded to a claimant any 24 compensation paid to the claimant under a homeowner's warranty contract or a 25 homeowner's insurance policy as compensation for the defects that are the subject of 26 the action. The amount of this deduction does not include any compensation paid by 27 the construction professional to the claimant to satisfy the claim or any compensation 28 paid under an insurance policy issued to the construction professional to satisfy the 29 claim. 30 Sec. 09.45.896. Exemption. AS 09.45.881 - 09.45.899 do not apply to claims 31 for personal injury claims, including death.
01 Sec. 09.45.899. Definitions. In AS 09.45.881 - 09.45.899, 02 (1) "action" means a civil action or an arbitration proceeding for 03 damages or indemnification; 04 (2) "claim" means a claim against a construction professional 05 concerning a defect in the design, construction, or remodel of a dwelling; 06 (3) "claimant" means a person who owns or is purchasing a dwelling 07 and who asserts a claim; 08 (4) "construction professional" means a contractor, an architect, or an 09 engineer who is engaged in the business of designing, constructing, or remodeling a 10 dwelling; in this paragraph, "contractor" has the meaning given in AS 08.18.171; 11 (5) "dwelling" means a single-family house, a duplex, or a multi- 12 family housing unit, and the mechanical and other systems, the other components, and 13 all improvements that are part of the house, duplex, or housing unit when the dwelling 14 is constructed or remodeled; for purposes of this paragraph, "multi-family housing 15 unit" means 16 (A) an individual housing unit in a multi-family housing 17 facility; and 18 (B) the interest of the owner of an individual housing unit in 19 the common areas and improvements of a multi-family housing facility; 20 (6) "multi-family housing facility" means a residential horizontal 21 property regime organized under AS 34.07, a residential condominium organized 22 under AS 34.08, and a residential cooperative organized under AS 10.15; 23 (7) "remodel" means a change to a dwelling if the change has a value 24 that is more than 25 percent of the value of the structure being changed; 25 (8) "serve" means to deliver by personal service or by certified mail, 26 return receipt requested, to the last known address of the addressee. 27 * Sec. 4. The uncodified law of the State of Alaska is amended by adding a new section to 28 read: 29 INDIRECT COURT RULE AMENDMENTS. AS 09.45.889(b), enacted by sec. 3 of 30 this Act, has the effect of changing 31 (1) Rule 79, Alaska Rules of Civil Procedure, by allowing the court to deny
01 attorney fees to a claimant in the situation described by AS 09.45.889(b), even if the claimant 02 is the prevailing party; 03 (2) Rule 82, Alaska Rules of Civil Procedure, by allowing the court to deny 04 costs to a claimant in the situation described in AS 09.45.889(b), even if the claimant is the 05 prevailing party. 06 * Sec. 5. The uncodified law of the State of Alaska is amended by adding a new section to 07 read: 08 APPLICABILITY. This Act applies to a claim if the contract for the work on which 09 the claim is based was entered into on or after the effective date of this Act. In this section, 10 "claim" has the meaning given in AS 09.45.899. 11 * Sec. 6. The uncodified law of the State of Alaska is amended by adding a new section to 12 read: 13 CONDITIONAL EFFECT. AS 09.45.889(b), enacted by sec. 3 of this Act, takes 14 effect only if sec. 4 of this Act receives the two-thirds majority vote of each house required by 15 art. IV, sec. 15, Constitution of the State of Alaska.