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[Utah Administrative Code Table of Contents]
[Title R156. Table of Contents]
R156-38-101 Title.
These rules are known as the "Residence Lien Restriction and Lien Recovery Fund Act Rules."
R156-38-102 Definitions.
In addition to the definitions in Title 38, Chapter 11, Residence Lien Restriction and Lien Recovery Fund Act; Title 58, Chapter 1, Division of Occupational and Professional Licensing Act; and Rule R156-1, General Rules of the Division of Occupational and Professional Licensing, which shall apply to these rules, as used in these rules:
(1) "Claimant" means a person who submits an application or claim for payment from the fund.
(2) "Necessary party" includes the division, on behalf of the fund, and the claimant.
(3) "Owner", as defined in Section 38-11-102 (12), does not include any person or developer who builds residences which are offered for sale to the public.
(4) "Permissive party" includes a licensee or qualified beneficiary who will be required to reimburse the fund if a claimant's claim is paid from the fund.
R156-38-103a Authority - Purpose - Organization.
(1) These rules are adopted by the division under the authority of Section 38-11-103 to enable the division to administer Title 38, Chapter 11, the Residence Lien Restriction and Lien Recovery Fund Act.
(2) The organization of these rules is patterned after the organization of Title 38, Chapter 11.
R156-38-103b Duties, Functions, and Responsibilities of the Division.
The duties, functions and responsibilities of the division with respect to the administration of Title 38, Chapter 11, shall, to the extent applicable and not in conflict with the Act or these rules, be in accordance with Section 58-1-106.
R156-38-104 Board.
Board meetings shall comply with the requirements set forth in Section R156-1-204.
R156-38-105 Adjudicative Proceedings.
(1) The classification of adjudicative proceedings initiated under Title 38, Chapter 11 is set forth at Sections R156-46b-201 and R156-46b-202.
(2) The identity and role of presiding officers for adjudicative proceedings initiated under Title 38, Chapter 11, is set forth in Sections 58-1-109 and R156-1-109.
(3) Issuance of investigative subpoenas under Title 38, Chapter 11 shall be in accordance with Subsection R156-1-110.
(4) Adjudicative proceedings initiated under Title 38, Chapter 11, shall be conducted in accordance with Title 63, Chapter 46b, Utah Administrative Procedures Act, and Rules R151-46b and R156-46b, Utah Administrative Procedures Act Rules for the Department of Commerce and the Division of Occupational and Professional Licensing, respectively, except as otherwise provided by Title 38, Chapter 11 or these rules.
(5) Claims shall be filed with the division and served upon all necessary and permissive parties.
(6) Service of claims or other pleadings by mail to a qualified beneficiary of the fund addressed to the address shown on the division's records with a certificate of service as required by R151-46b-8, shall constitute proper service. It shall be the responsibility of each registrant to maintain a current address with the division.
(7) A permissive party is required to file a response to a claim against the fund within 30 days of notification by the division of the filing of the claim, to perfect the party's right to participate in the adjudicative proceeding to adjudicate the claim.
(8) The findings of fact and conclusions of law established by a judgment entered by a civil court or a final order entered by an administrative agency submitted in support of or in opposition to a claim against the fund shall not be subject to readjudication in an adjudicative proceeding to adjudicate the claim.
(9) A party to the adjudication of a claim against the fund may be granted a stay of the adjudicative proceeding during the pendency of a judicial appeal of a judgment entered by a civil court or the administrative or judicial appeal of an order entered by an administrative agency provided:
(a) the administrative or judicial appeal is directly related to the adjudication of the claim; and
(b) the request for the stay of proceedings is filed with the presiding officer conducting the adjudicative proceeding and concurrently served upon all parties to the adjudicative proceeding, no later than the deadline for filing the appeal.
R156-38-108 Notification of Rights under Title 38, Chapter 11.
(1) A notice in substantially the following form shall prominently appear in an easy-to-read type style and size in every contract between an original contractor and owner and in every notice of claim filed under Section 38-1-7 against the owner of an owner-occupied residence or against an owner-occupied residence:
"X. PROTECTION AGAINST LIENS AND CIVIL ACTION. Notice is hereby provided in accordance with Section 38-11-108 of the Utah Code that under Utah law an "owner" may be protected against liens being maintained against an "owner-occupied residence" and from other civil action being maintained to recover monies owed for "qualified services" performed or provided by suppliers and subcontractors as a part of this contract, if and only if the following conditions are satisfied:
(1) the owner entered into a written contract with either a real estate developer or an original contractor;
(2) the original contractor was properly licensed or exempt from licensure under Title 58, Chapter 55, Utah Construction Trades Licensing Act at the time the contract was executed; and
(3) the owner paid in full the original contractor or real estate developer or their successors or assigns in accordance with the written contract and any written or oral amendments to the contract."
R156-38-202a Initial Assessment Procedures.
(1) The initial assessment shall be a flat or identical assessment levied against all qualified beneficiaries to create the fund.
(2) The amount of the initial assessment shall be established by the division and board in accordance with the procedures for a "new program" under Subsection 63-38-3.2 (5).
R156-38-202b Special Assessment Procedures.
(1) Special assessments shall take into consideration the claims history against the fund.
(2) The amount of special assessments shall be established by the division and board in accordance with the procedures set forth in Subsection 38-11-206 (1).
R156-38-203 Credit to Claimant Lifetime Cap.
Amounts collected by subrogation under Section 38-11-205 subsequent to a payment from the fund shall be credited to the lifetime cap of a qualified beneficiary or laborer under Subsection 38-11-203 (4)(a)(ii) less the costs incurred by the Attorney General in subrogation efforts.
R156-38-204a Claims Against the Fund by Nonlaborers - Supporting Documents and Information.
The following supporting documents shall, at a minimum, accompany each nonlaborer claim for recovery from the fund:
(1) one of the following:
(a) a copy of the written contract:
(i) between the owner of the owner-occupied residence or the owner's agent and the original contractor for the performance of qualified services, to obtain the performance of qualified services by others, or for the supervision of the performance by others of qualified services in construction on the residence; or
(ii) between the owner of the owner-occupied residence or the owner's agent and the real estate developer for the purchase of an owner-occupied residence; or
(b) a copy of a civil judgment containing a finding that the owner of the owner-occupied residence entered into a written contract in compliance the requirements of Subsection 38-11-204 (3)(a);
(2) if the claim involves an original contractor, documentation that the original contractor is licensed or exempt from licensure under Title 58, Chapter 55, Utah Construction Trades Licensing Act;
(3) one of the following:
(a) an affidavit from the original contractor or real estate developer acknowledging that the owner of the owner-occupied residence paid the original contractor or real estate developer in full in accordance with the written contract and any amendments to the contract;
(b) a copy of a civil judgment containing a finding that the owner of the owner-occupied residence paid the original contractor or real estate developer in full in accordance with the written contract and any amendments to the contract; or
(c) documentation that the claimant has been prevented from satisfying Subsections (a) and (b), together with independent evidence establishing that the owner of the owner-occupied residence paid the original contractor or real estate developer in full in accordance with the written contract and any amendments to the contract;
(4) one or more of the following as required:
(a) a copy of an action date stamped by a court of competent jurisdiction filed by the claimant against an original contractor, subcontractor or real estate developer described in Subsection 38-11-204 (3)(c) to recover monies owed for qualified services performed, filed within 180 days from the date the claimant last provided qualified services; and
(b) a copy of the Notice of Commencement of Action filed with the division; or
(c) documentation that a bankruptcy filing by the original contractor, subcontractor or real estate developer prevented claimant from satisfying Subsections (a) and (b);
(5) one of the following:
(a) a copy of a civil judgment entered in favor of claimant against the original contractor, subcontractor or real estate developer containing a finding that the original contractor, subcontractor or real estate developer failed to pay the claimant pursuant to their contract with the claimant and any amendments to the contract; or
(b) documentation that a bankruptcy filing by the original contractor, subcontractor or real estate developer prevented the claimant from obtaining such a civil judgment, together with independent evidence establishing that the original contractor, subcontractor or real estate developer failed to pay the claimant pursuant to their contract with the claimant and any amendments to the contract;
(6) one or more of the following as required:
(a) a copy of a supplemental order issued following the civil judgment entered in favor of claimant;
(b) a copy of the return of service of the supplemental order indicating either that service was accomplished on the original contractor, subcontractor or real estate developer or that said contractor or developer could not be located or served;
(c) a writ of execution issued if any assets are identified through the supplemental order or other process, which have sufficient value to reasonably justify the expenditure of costs and legal fees which would be incurred in preparing, issuing, and serving execution papers and in holding an execution sale; and
(d) documentation that a bankruptcy filing or other action by the original contractor or real estate developer prevented the claimant from satisfying Subparagraphs (a) through (d);
(7) certification that the claimant is not entitled to reimbursement from any other person at the time the claim is filed and that the claimant will immediately notify the presiding officer if the claimant becomes entitled to reimbursement from any other person after the date the claim is filed; and
(8) one of the following:
(a) an affidavit from the owner establishing that the owner is an owner as defined in Subsection 38-11-102 (12) and that the residence is an owner-occupied residence as defined by Subsection 38-11-102 (13);
(b) a copy of a civil judgment containing a finding that the owner is an owner as defined by Subsection 38-11-102 (12) and that the residence is an owner-occupied residence as defined by Subsection 38-11-102 (13); or
(c) documentation that the claimant has been prevented from obtaining an owner-occupied residence affidavit together with independent evidence establishing that the owner is an owner as defined by Subsection 38-11-102 (12) and that the residence is an owner-occupied residence as defined by Subsection 38-11-102 (13).
(9) one or more of the following:
(a) a copy of invoices supporting the qualified services claimed;
(b) a copy of a civil judgment containing a finding as to the dates the qualified services claimed were provided and the value of the qualified services claimed; or
(c) independent evidence of the dates the qualified services were provided and the value of the claimed qualified services.
(10) In claims in which the presiding officer determines that the claimant has made a reasonable but unsuccessful effort to produce all documentation specified under this rule to satisfy any requirement to recover from the fund, the presiding officer may elect to accept the evidence submitted by the claimant if the requirements to recover from the fund can be established by that evidence.
(11) A separate claim must be filed for each residence, and a separate filing fee must be paid for each claim.
R156-38-204b Format for Notice of Commencement of Action.
The Notice of Commencement required under Subsection R156-38-204a(5)(b) shall be in substantially the following format:
John Doe, : Notice of Commencement Plaintiff : of Action : -vs- : NCA No. : Richard Roe, : Defendant : Notice is hereby provided of the filing of Case No. (number) on (date) before (Court). Brief explanation of nature of case: Address of defendant: Name and address of potential fund claimant: Name and address of original contractor, subcontractor, and/or real estate developer described in Subsection 38-11-204 (3)(c): For each owner-occupied residence included in the civil action: Name and address of the owner of the owner-occupied residence; Street address of the owner-occupied residence; Amount of damages sought against the owner-occupied residence; Last date qualified services were provided for the owner-occupied residence by the potential fund claimant: Signature of Claimant or claimant's representative Date of signature
R156-38-204c Claims Against the Fund by Laborers - Supporting Documents.
(1) The following supporting documents shall, at a minimum, accompany each laborer claim for recovery from the fund:
(a) one of the following:
(i) a copy of a wage claim assignment filed with the Industrial Commission of the Utah Labor Division for the amount of the claim, together with all supporting documents submitted in conjunction therewith; or
(ii) a copy of an action filed by claimant against claimant's employer to recover wages owed;
(b) one of the following:
(i) a copy of a final administrative order for payment issued by the Industrial Commission of Utah Labor Division containing a finding that the claimant is an employee and that the claimant has not been paid wages due for work performed at the site of construction on an owner-occupied residence;
(ii) a copy of a civil judgment entered in favor of claimant against the employer containing a finding that the employer failed to pay the claimant wages due for work performed at the site of construction on an owner-occupied residence; or
(iii) a copy of a bankruptcy filing by the employer which prevented the entry of an order or a judgment against the employer;
(c) one of the following:
(i) an affidavit from the owner establishing that the owner is an owner as defined in Subsection 38-11-102 (12) and that the residence is an owner-occupied residence as defined by Subsection 38-11-102 (13);
(ii) a copy of a civil judgment containing a finding that the owner is an owner as defined by Subsection 38-11-102 (12) and that the residence is an owner-occupied residence as defined by Subsection 38-11-102 (13); or
(iii) documentation that the claimant has been prevented from obtaining an owner-occupied residence affidavit together with independent evidence establishing that the owner is an owner as defined by Subsection 38-11-102 (12) and that the residence is an owner-occupied residence as defined by Subsection 38-11-102 (13).
(2) When a laborer makes claim on multiple residences as a result of a single incident of non-payment by the same employer, the division must require payment of at least one application fee required under Section 38-11-204 (1)(b) and at least one registration fee required under Subsection 38-11-204 (5), but may waive additional application and registration fees for claims for the additional residences, where no legitimate purpose would be served by requiring separate filings.
R156-38-204d Calculation of Costs, Attorney Fees and Interest for Payable Claims.
(1) Payment for qualified services, costs, and interest shall be made as specified in Section 38-11-203.
(2) For claims determined by the division to be payable from the fund, the division shall order payment of attorney fees in an amount not exceeding the following:
(a) If a civil judgment awards a specific dollar amount for attorney fees, the division shall order payment as ordered in the civil judgment, to the extent that the attorney fees are attributable to the owner-occupied residence at issue in the claim.
(b) Otherwise, the division shall order payment of reasonable attorney fees, documented according to the provisions of Rule 4-505, Utah Code of Judicial Administration, subject to the following limitations:
(i) if the payable amount of qualified services is $3,000 or less, not more than 33% of the value of the qualified services and not exceeding $750;
(ii) if the payable amount of qualified services is greater than $3,000 and $10,000 or less, not more than 25% of the value of qualified services and not exceeding $2,000; or
(iii) if the payable amount of qualified services is greater than $10,000, attorney fees in an amount of not more than 20% of the value of qualified services and not exceeding $7,000.
(3) The above limits may be waived by the director in those unique claims where manifest injustic would otherwise result. The burden is on the claimant to demonstrate manifest injustice.
R156-38-301 Registration as a Qualified Beneficiary - All License Classifications Required to Register Unless Specifically Exempted - Exempted Classifications.
(1) All license classifications of contractors are determined to be regularly engaged in providing qualified services for purposes of automatic registration as a qualified beneficiary, as set forth in Subsections 38-11-301 (1) and (2), with the exception of the following license classifications:
Primary Classification Subclassification Number Number Classification E100 General Engineering Contractor S211 Boiler Installation Contractor S262 Granite and Pressure Grouting Contractor S320 Steel Erection Contractor S322 Metal Building Erection Contractor S323 Structural Stud Erection Contractor S340 Sheet Metal Contractor S360 Refrigeration Contractor S440 Sign Installation Contractor S441 Non Electrical Outdoor Advertising Sign Contractor S450 Mechanical Insulation Contractor S470 Petroleum System Contractor S480 Piers and Foundations Contractor I101 General Engineering Trades Instructor I102 General Building Trades Instructor I103 General Electrical Trades Instructor I104 General Plumbing Trades Instructor I105 General Mechanical Trades Instructor
(2) Any person holding a license requiring registration in the fund that is on inactive status on the assessment date of any special assessment of the fund, shall be exempt from payment of that specific assessment and any assessment made during the time the license remains on inactive status and the licensee does not engage in the licensed occupation or profession.
(3) Before a licensee on inactive status, who would otherwise be required to pay an assessment, can be reinstated to an active status, the licensee must pay:
(a) the initial assessment of $195 assessed July 1, 1995, if that assessment has never been paid by that licensee; and
(b) the most recent special assessment immediately preceding the date on which the license is reinstated to active status.
R156-38-302 Renewal and Reinstatement Procedures.
(1) Renewal notices required in connection with a special assessment shall be mailed to each registrant at least 30 days prior to the expiration date for the existing registration established in the renewal notice. Unless the registrant pays the special assessment by the expiration date shown on the renewal notice, the registrant's registration in the fund automatically expires on the expiration date.
(2) Renewal notices shall be sent by letter deposited in the post office with postage prepaid, addressed to the last address shown on the division's records. Such mailing shall constitute legal notice. It shall be the duty and responsibility of each registrant to maintain a current address with the division.
(3) Renewal notices shall specify the amount of the special assessment, the application requirement, and other renewal requirements, if any; shall require that each registrant document or certify that the registrant meets the renewal requirements; and shall advise the registrant of the consequences of failing to renew a registration.
(4) Renewal notices shall specify a renewal application due date no later than the expiration date for the existing registration.
(5) Renewal applications must be received by the division in its ordinary course of business on or before the renewal application due date in order to be processed as a renewal application. Late applications will be processed as reinstatement applications.
(6) A registrant whose registration has expired may have the registration reinstated by complying with the requirements and procedures specified in Subsection 38-11-302 (5).
[Indexing]
KEY: licensing, contractors, liens
September 16, 1999
[Editor's note: Below are references
to the Utah Code that are listed by the
agency making this rule as authority
for the rule.]
38-11-101
58-1-106
(1)
58-1-202
(1)
