STAND. COM. REP. NO. 1840
Honolulu, Hawaii
RE: H.B. No. 420
H.D. 3
S.D. 2
Honorable Ronald D. Kouchi
President of the Senate
Thirty-Third State Legislature
Regular Session of 2025
State of Hawaii
Sir:
Your Committee on Judiciary, to which was referred H.B. No. 420, H.D. 3, S.D. 1, entitled:
"A BILL FOR AN ACT RELATING TO REMEDIES,"
begs leave to report as follows:
The purpose and intent of this measure is to:
(1) Clarify the applicability of the statute of repose to apply to contract, tort, and statutory claims;
(2) Clarify the required contents of a notice of claim of a construction defect served on a contractor;
(3) Require claimants to comply with provisions of the Contractor Repair Act before proceeding with or joining in a class action; and
(4) Clarify the process and time frame by which a claimant may accept or reject a contractor's offer to settle and authorize repairs.
Your Committee received testimony in support of this measure from the Hawaiʻi Association of REALTORS; Fred Lau Hawaiian Landscape Company, Inc.; Newport Pacific Cabinets, Inc.; Paradigm Construction LLC; Mutual Housing Association of Hawaiʻi, Inc.; Hawaiiana Management Company, Ltd.; Hawaii Laborers and Employers Cooperation and Education Trust; NAIOP Hawaii; Jayar Construction, Inc.; Housing Hawaiʻi's Future; Building Industry Association of Hawaii; Nordic PCL Construction, Inc.; Gentry Homes, Ltd.; Hawaii Operating Engineers Industry Stabilization Fund Political Action Committee; Castle & Cooke Hawaii; Palehua Townhouse Association; Alliant Insurance Services, Inc.; Z Contractors Inc.; Island Flooring; Hawaii Insurers Council; Chamber of Commerce Hawaii; Holomua Collaborative; Young Democrats of Hawaiʻi; Hawaiʻi YIMBY; Hawaiʻi Regional Council of Carpenters; Inspired Closets Hawaii; Kapolei Chamber of Commerce; Hawaii Credit Union League; Case Lombardi A Law Corporation; Commercial Sheetmetal Co., Inc.; Pacific Resource Partnership; D.R. Horton Hawaii; Royal Contracting Co. Ltd.; A-Plus Seamless Raingutters, Inc.; KY International; Tru-Door Hawaii; Vinyl Tech and Masontry, Inc.; and numerous individuals.
Your Committee received testimony in opposition to this measure from Kadsen Turner Thomson Booth, LLLC; LippSmith LLP; and four individuals.
Your Committee received comments on this measure from one individual.
Your Committee finds that it is important to ensure that the court maintains the proper authority when resolving litigation relating to construction defects. This measure will promote fairness to litigants and ensure efficient use of judicial resources during disputes resulting from construction defects.
In light
of the concerns raised in testimony, your Committee has amended this measure
by:
(1) Deleting
legislative findings;
(2) Clarifying
that the ten-year statute of repose applies to all actions, whether in
contract, tort, statute, or otherwise, and that the standard statute of
limitations periods apply to those actions;
(3) Clarifying
that an improvement is substantially complete upon the earliest of the issuance
of a certificate of occupancy or the filing of an affidavit of publication and
notice of completion within the circuit court of the judicial circuit where the
property is situated in compliance with section 507-43(f), Hawaii Revised
Statutes (HRS);
(4) Requiring
each building or improvement be considered as a separate improvement for the
purpose of determining the limitations period if the improvement consists of
multiple buildings or improvements;
(5) Adding
definitions for "date of completion" and "improvement";
(6) Clarifying
that a notice of a claim of construction defect may be for any combination of
defects in the design, construction, or remodeling of a dwelling or premises;
(7) Deleting
language that would have required homeowners to provide expert reports with the
notice of a claim of construction defect;
(8) Deleting
language that would have:
(A) Required
each individual claimant or class member for a claim of construction defect to
comply with chapter 672E, HRS; and
(B) Prohibited a person from being permitted to join a class action brought under chapter 672E, HRS, unless that person first complied with the requirements of chapter 672E, HRS;
(9) Requiring
inspections and testing performed pursuant to section 672E-4, HRS, to be
completed within nine months of the contractor's request to inspect, unless the
parties agree or the court orders otherwise;
(10) Inserting
language specifying that an offer of settlement not accepted within the
applicable time period pursuant to section 672E-5, HRS, or ten days after
service for any subsequent offers, is deemed withdrawn and evidence thereof
shall not be admissible except to determine entitlement to recovery of costs;
(11) Inserting
language clarifying that parties required to attempt to resolve a claim through
mediation are not required to attempt to resolve the dispute through mediation
more than once;
(12) Inserting
language requiring mediation pursuant to section 672E-7, HRS, to be completed
within twelve months of the filing of the notice of the claim, unless the
parties agree or the court orders otherwise;
(13) Inserting
language restricting the pre-filing of lawsuits under section 672E-8, HRS, to
no more than six months before the end of the applicable limitation or repose
period;
(14) Inserting a savings clause; and
(15) Making
technical, nonsubstantive amendments for the purposes of clarity and
consistency.
As affirmed by the record of votes of the members of your Committee on Judiciary that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 420, H.D. 3, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 420, H.D. 3, S.D. 2.
Respectfully submitted on behalf of the members of the Committee on Judiciary,
|
|
|
________________________________ KARL RHOADS, Chair |
|
|
|
|