State and Local Reporter - 04/29/2003 (Plain Text Version)

Debora Trimpe, Chair
Flower Mound, Texas

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In this issue:
Notice and Opportunity to Repair Making Steady Progress
No Improvement for State Budget Crisis
Idaho Governor Signs Tort Reform, Opportunity to Repair Bills
Builders Denounce New Jersey Anti-Growth Plan
Washington City Claims Fee Is a "Tax"
Industry News
New Web Site Offers Help with Compliance
Spring Board Meeting Preview

Idaho Governor Signs Tort Reform, Opportunity to Repair Bills

Idaho Governor Dirk Kempthorne recently authorized laws to cap lawsuit damages and establish a process for setting construction defect disputes out of court. House Bills 92 and 133, respectively, are steps toward making general liability insurance more attainable and affordable for builders.

“Our members have seen 400-500% increases in general liability insurance costs, with no end to the increases in sight,” said John Eaton, government affairs director for the Building Contractors Association of Southwestern Idaho. Housing affordability is suffering, which is especially detrimental because housing is the only true growth industry in the state, he said.

House Bill 92 will reduce the legal risk of conducting business in Idaho by:

Capping punitive damages at three times the amount of economic damages or $250,000, whichever is greater
Limiting to $250,000 the amount of non-economic damages that plaintiffs can collect
Making it more difficult for punitive damages to be awarded by raising the burden of proof

While the law seems like common sense for business owners, it was strongly contested by the state’s trial lawyers association who warned it would deny just compensation to victims. Eaton said that many of the state’s legislators called this the toughest battle they had ever fought.

The association’s other priority was advocating a process to give builders the chance to repair a construction defect before the dispute goes to court. Keeping attorneys out of the dispute resolution process will ostensibly reduce insurance losses, reduce the cost of general liability insurance and eventually make housing more affordable. The “notice and opportunity to repair” bill is based on NAHB model legislation and is similar to laws already passed in Arizona, California, Kansas, Kentucky, Nevada, Texas, Washington and West Virginia. The bill was sponsored by Representative Lee Gagner (R-Idaho Falls), a builder/developer and member of NAHB, and Senator John Goedde (R-Coeur d’Alene), an independent insurance agent.

After a successful legislative session, the Idaho builders association’s focus has shifted to education. The group plans to enact an information campaign to teach members and the public about the new construction defect resolution process.