a:\newslw.96 [4]Alan Lee MitchellStephen De'ak202001-04-06T17:05:00Z2006-07-01T22:27:00Z2006-07-01T22:27:00Z112166935 5716813511.8026 FURRER & SCOTT LLCConsider . . .VOL. 10, ISSUE 2 April, 2001Law OfficesFURRER & SCOTT LLC9185 SW BURNHAM ST. POST OFFICE BOX 23414TIGARD, OR 97223 TIGARD, OR 97281(503) 620-4540 -- (800) 334-8986 -- FAX: (503) 620-4315www.furrer-scott.comCCB LICENSE SUSPENSIONMost contractors understand that the CCB will suspend their license if the contractor’s surety bond or liability insurance lapses. More broadly, the CCB can suspend a contractor’s license if it finds the contractor has engaged in “dishonest or fraudulent conduct.”Recent changes to the CCB’s administrative rules expand the definition of the phrase “dishonest or fraudulent conduct.” OAR 812-002-0260 has long included obvious conduct such as submitting a false license application. (See the CCB’s web site for access to their OAR: www.ccb.state.or.us.)The new changes add failure to pay wages as determined by BOLI or to pay any penalty or fine imposed by any local, state or federal government. The rules previously listed failure to pay prevailing wages on public works contracts.Thus, the failure to pay proper wages, whether on public or private projects, can lead to license suspension.Also, don’t forget the “BOLI Bite” as discussed in our April 2000 newsletter. That article noted BOLI’s power to pursue administrative civil penalties even though the employer and employee reach a settlement agreement. In this situation, the contractor could be faced with two violations of the above CCB rules: failure to pay the wages and being assessed a penalty by a governmental body.The “bottom line”? Wage claims are one of the easiest ways for an employer to get into trouble—make sure someone at your office is on top of paying your employees (and keeping appropriate records).CHANGES TO UCC ARTICLE 9Anyone who gives or takes a security interest under UCC Article 9 needs to be aware that this law is in the process of significant change. Many states have already adopted these changes (or most of them), including Washington and California.Bills to make similar changes to Oregon’s law are currently pending before the Oregon Legislature. It is likely that the Legislature will approve many, if not all, of these changes. (You can visit the Oregon Legislature’s web site to track this and other measures: www.leg.state.or.us.)If your security interest involves other states, it may already be subject to the revised Article 9. For example, if you take a security interest from someone who lives in Washington, the new law may apply.The changes to Article 9 are potentially very significant to both creditors and debtors. If you need further information, feel free to contact our office.IS A GENERAL CONTRACTOR LIABLE TO AN INJURED EMPLOYEE OF A SUB-CONTRACTOR?In a recent case, the Oregon Court of Appeals answered this question “no.” The case does, however, present some potential concerns for general contractors. George v. Myers, 169 Or App 472 (2000).The defendant was a general contractor building a new “spec” home in Tigard. The plaintiff was an employee of the framing subcontractor and was injured when he and other framing employees attempted to move a bunk of studs by hand.Of course, the Workers’ Compensation statutes prevented the injured employee from suing his employer. His attempt to place liability on the general contractor, however, failed.First, the employee alleged that the general contractor was liable as an “indirect employer” under Oregon’s Employer Liability Act (“ELA”). The court held that these claims failed all three tests under the ELA. First, the general contractor was not involved in a “common enterprise” with the framing subcontractor. Second, the general contractor did not “retain control” over the actions of the framing subcontractor and its employees. Third, the general contractor did not exert “actual control” over the framing subcontractor or its employees.Second, the employee alleged that the general contractor was liable under the Oregon Safe Employment Act (“OSEA”), which adopts many of the federal Occupational Safety and Health Act regulations. Again, the court disagreed.The court first noted that the relevant OSEA regulations only to “employers” and not to indirect employers. Thus, the general contractor had no liability to the plaintiff.The court next noted that, although an owner can sometimes be liable under the OSEA for providing an unsafe workplace, the general contractor in this case did not fall into this category. (Because it was a “spec” home, the general contractor owned the land at the time of the injury.) The court noted that the framing subcontractor was in charge of a specialized task over which the defendant did not retain or exercise control. Further, the risk of plaintiff’s fall from the third story was so obvious that it was within his employer’s area of expertise and was not, therefore, the general contractor’s responsibility.“PAYMENT IN FULL” CHECKS—Different Results in Oregon and Washington?Sales taxes and self-service gasoline aren’t the only differences between Oregon and Washington law.Construction contractors and material suppliers should be aware of the different treatment given “payment in full” checks in Oregon and Washington. In Oregon, negotiating a payment in full check does not generally discharge a disputed debt or negate an otherwise existing settlement. ORS 73.0311. In Washington, however, negotiating a payment in full check does generally satisfy a disputed debt. RCW 62A.3-311.A debtor’s intent that a check is tendered as payment in full may be stated on the front or back of the check, or on a document submitted together with the check.There are exceptions to Oregon’s general rule. If an individual creditor provides written acceptance of a payment in full check, then a payment in full check will discharge a disputed debt. This exception also applies to organizational creditors, but an officer or employee with authority to settle claims must provide written acceptance of a payment in full check.Washington’s general rule is also subject to exceptions. First, if an organizational creditor notifies a debtor that payment must be sent to a specific person or place, then the debtor must send a payment in full check to that person or place or the debt is not discharged. Second, if a creditor, within 90 days of negotiating a payment in full check, tenders repayment of that check, then the debt is not discharged.Whether Oregon or Washington law should apply becomes more complex when a Washington creditor is dealing with an Oregon debtor or vice versa. The safest course of action is to seek competent legal counsel. The intricacies of negotiable instruments can be difficult to navigate, and failing to comply with the appropriate rules can translate into costly errors. Aaron L. BlankenshipFIRM NEWS:MICHAEL J. SCOTT spoke at a February 1, 2001 seminar in Salem for Lorman Business Seminars entitled “Oregon Construction Law: Claim Avoidance and Dispute Resolution.” Stephen Eichelberger, a Salem attorney, and Roger L. Brown, a Portland consultant, also presented materials.MICHAEL J. SCOTT, DOUGLAS R. HOOKLAND, DOUGLAS L. GALLAGHER and ALAN L. MITCHELL spoke at an April 5, 2001 seminar in Portland for Lorman Business Seminars entitled “Oregon Construction Lien and Bond Law.”THOMAS J. MURPHY spoke at a February 28, 2001 seminar in Bend for United Pipe & Supply Co. entitled “Keeping Legal and Getting Paid.”FURRER & SCOTT’S web site is newly updated (www.furrer-scott.com).This newsletter is published quarterly by the law firm of Furrer & Scott LLC 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