Construction Contractors Board (CCB) Update

Online CLE

Construction Contractors Board

(CCB) Update

.5 General CLE credit

ID 95835 (part of 92562)

From the Oregon State Bar CLE seminar Issue Spotting for

Construction Lawyers, presented on October 21, 2022

Chapter 10

Guide to CCB Bonds and CCB Bond Claims

Van White III

Samuels Yoelin Kantor

Portland, Oregon

Contents

What Is a License Bond?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10–1

Bond Amounts Dier for Commercial and Residential Contractors . . . . . . . . . . . . . . . . 10–2

Residential vs. Commercial Bond Endorsement . . . . . . . . . . . . . . . . . . . . . . . . . . 10–2

Complaints Against CCB License Bonds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10–3

Parties Who Have the Right to Receive Payment from a CCB License Bond . . . . . . . 10–3

Pre-Complaint Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10–4

Deadline to File CCB Complaints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10–4

CCB Mediation for Residential Complaints . . . . . . . . . . . . . . . . . . . . . . . . . 10–5

Complaint Process If Matter Not Settled at CCB Mediation . . . . . . . . . . . . . . . . . . . . 10–6

Priorities and Limits Against CCB License Surety Bonds . . . . . . . . . . . . . . . . . . . . . 10–6

CCB Can Suspend Contractors Who Have Unpaid Construction Debt . . . . . . . . . . . . . . 10–7

Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10–9

CCB Mediation: Overview and Common Questions . . . . . . . . . . . . . . . . . . . . . . . .10–11

Chapter 10—Guide to CCB Bonds and CCB Bond Claims

10–iiIssue Spotting for Construction Lawyers

Chapter 10—Guide to CCB Bonds and CCB Bond Claims

10–1Issue Spotting for Construction Lawyers

GUIDE TO CCB BONDS AND CCB BOND CLAIMS

By: Van M. White

Samuels Yoelin Kantor, LLP

All contractors licensed with the Oregon Construction Contractors Board (“CCB”) must

provide a surety bond (also referred to as a license bond) as a condition of obtaining and

renewing their CCB license. Because of the low bond amounts required for a CCB license and

CCB regulations regarding how much a claimant may receive from a CCB license bond, the

CCB license bond is sometimes overlooked as a means to collect money from a contractor.

However, in my experience, complaints against a CCB license bond can be effective means to

collect from a contractor. That is partly because of the effect that an unpaid judgment can have

on a contractor's CCB license. This article addresses CCB license bond requirements, the CCB

complaint process (which must be followed to secure the right to payment from a CCB license

bond), and how to leverage an unpaid judgment against a contractor licensed with the CCB into

payment.

What is a license bond?

A license bond is a type of surety bond required by a governmental entity as a

prerequisite to receiving a specific business license. A surety bond is a promise by a surety or

guarantor to pay one party (the obligee) a certain amount if a second party (the principal) fails to

meet some obligation, such as failing to fulfill the terms of a construction contract. A surety

bond protects the obligee against losses resulting from the principal’s failure to meet the

obligation. A license bond serves as a contract between three parties: (1) the principal (e.g., a

contractor performing construction work pursuant to its contractor’s license); (2) the obligee

(e.g., the governmental agency, such as the CCB, which requires the license bond, for the benefit

of persons who have filed a timely complaint against a contractor's license bond and receive a

judgment against the contractor); and (3) the surety (i.e., the company that issues the bond and

ensures that the principal

's obligations will be performed). If the obligations of the contractor are

not met, the CCB may order that the surety pay the complainant.

A license bond is different than an insurance policy. A license bond is security that the

contractor will fulfil its contractual obligations. A CCB license bond generally covers breach of

contract and negligent and improper work performed by the licensed contractor. The purpose of

a CCB license bond is to help ensure that a contractor licensed with the CCB pays a final order

issued by the CCB to pay damages to a complainant. If the contractor fails to do so, the

complainant may receive some or all of its damages from the contractor’s CCB license bond. If

a surety makes payment to a CCB complainant because the contractor failed to pay a CCB final

order, the contractor is required by its contract with the surety to repay the surety for the losses

incurred by the surety.

Contractors are often surprised to find out that, contrary to their liability insurance policy,

if the surety pays a CCB award for damages the surety will expect to be reimbursed in full by the

contractor. To the extent the surety incurs attorney's fees in obtaining reimbursement from the

contractor, its contract with the contractor likely includes a provision entitling them to their

attorney’s fees to collect the amounts they paid to any CCB license bond claimant(s). In

Chapter 10—Guide to CCB Bonds and CCB Bond Claims

10–2Issue Spotting for Construction Lawyers

addition, if the contractor is a corporation or LLC, the surety will likely require at least one

personal guaranty from the owners or members of the entity.

Bond Amounts Differ for Commercial and Residential Contractors

Commercial contractors in Oregon are required to provide a CCB license bond in the

amount of $75,000, $50,000, or $20,000 – the amount depends upon the contractor’s commercial

endorsement classification at the CCB (i.e., Commercial General Contractor Level 1,

Commercial Specialty Contractor Level 1, Commercial General Contractor Level 2, Commercial

Specialty Contractor Level 2, and Commercial Developer).

Residential contractors in Oregon are required to provide a CCB license bond in the

amount of $20,000, $15,000, or $10,000 – the amount depends upon the contractor’s residential

endorsement classification at the CCB (i.e., Residential General Contractor, Residential

Specialty Contractor, or Residential Limited Contractor).

Contractors licensed at the CCB with both a commercial endorsement and a residential

endorsement are required to provide two CCB license bonds – one for their commercial

endorsement and one for their residential endorsement. The CCB can also require contractors

under certain circumstances to provide an increased license bond up to five times the amount

otherwise required for the category of license chosen at the CCB. Those circumstances include a

business or owner of a business that has unpaid debts under a final order, arbitration award or

determination of the CCB.

Residential vs. Commercial Endorsement

Contractors with only a Residential endorsement at the CCB may work on any residential

or small commercial structure or project in Oregon. For purposes of CCB license endorsements

and complaints against CCB license bonds, Residential includes residential structures and small

commercial structures. Residential Structure is defined as: a site built home; a structure that

contains one or more dwelling units and is four stories or less above grade; a condominium,

rental residential unit or other residential dwelling unit that is part of a larger structure (if the

property interest in the unit is separate from the property interest in the larger structure); a

modular home constructed off-site; a manufactured dwelling; and a floating home.

Small Commercial Structure is defined as: a nonresidential structure that has a ground

area of 10,000 square feet or less, including exterior walls, and a height of not more than 20 feet

from the top surface of the lowest flooring to the highest interior overhead finish of the structure;

a nonresidential leasehold, rental unit, or other unit that is part of a larger structure, if the unit has

a ground area of 12,000 square feet or less, excluding exterior walls, and a height of not more

than 20 feet from the top surface of the lowest flooring to the highest interior overhead finish of

the unit; or a nonresidential structure of any size if the contract price for all construction to be

performed on the structure as part of a construction project does not total more than $250,000.

Contractors with only a Commercial endorsement at the CCB may work on any Small

Commercial Structure or large commercial structure or project in Oregon. For purposes of CCB

license endorsements and complaints against CCB license bonds, commercial includes Small

Commercial Structures (as defined above) and large commercial structures. Large Commercial

Chapter 10—Guide to CCB Bonds and CCB Bond Claims

10–3Issue Spotting for Construction Lawyers

Structure is defined as a structure that is not a Residential Structure or a Small Commercial

Structure.

If a contractor has a Residential endorsement with the CCB, their CCB license bond is

available only for payments ordered by the CCB involving Residential or Small Commercial

Structures or for the development of property zoned for or intended for use compatible with

Residential or Small Commercial Structures. If a contractor has a Commercial Endorsement

with the CCB, their CCB license bond is only available for payments ordered by the CCB

involving Small or Large Commercial Structures or the development of property zoned or

intended for use compatible with Small or Large Commercial Structures.

If a contractor has both a Residential and a Commercial endorsement with the CCB (thus,

they have 2 license bonds on file with the CCB), the license bond for their Residential

endorsement is available only for payments ordered by the CCB involving Residential or Small

Commercial Structures and the license bond for their Commercial endorsement is only available

for payments ordered by the CCB involving Small or Large Commercial structures.

The CCB has separate procedures with respect to filing complaints against a contractor's

license bond depending upon whether the complaint is against a residential or commercial bond.

In general, complaints against residential license bonds are first filed at the CCB on a CCB

complaint form and then filed in court

. The procedure for complaints against commercial license

bonds requires that the complainant first file a lawsuit and then file a CCB complaint form with

the CCB and the surety. The distinction between the two procedures is important and failure to

follow the proper procedure could result in dismissal of the complaint by the CCB and loss of the

ability to access the license bond.

COMPLAINTS AGAINST CCB LICENSE BONDS

In order to secure the right to receive payment from a CCB license surety bond, the

complainant must file a timely complaint against the contractor at the CCB. But, because the

CCB no longer adjudicates complaints in house, the complainant must also file a complaint in

court, arbitration, or, in certain circumstances, at the Oregon Bureau of Labor & Industries

(BOLI) against the contractor. That's because only Oregon court judgments and BOLI final

orders are payable from a contractor’s CCB license bond. The process to secure the right to

receive payment from a CCB license bond, and the requirements regarding the filing of the CCB

complaint and lawsuit/BOLI complaint, differ depending upon the type of property that is the

subject of the complaint (i.e., Residential or Commercial) and whether the contractor has a

Residential or Commercial endorsement at the CCB.

Parties Who Have the Right to Receive Payment From a CCB License Bond

The following parties may receive payment from a contractor’s CCB license bond:

1. Property owners who allege breach of contract, negligence, or improper work;

2. Property owners who expended funds in discharging a construction lien;

3. Employees alleging non-payment of wages;

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10–4Issue Spotting for Construction Lawyers

4. Suppliers alleging non-payment for materials sold;

5. Subcontractors alleging non-payment for labor or materials provided; and

6. Primary contractors alleging breach of contract, negligence, or improper work.

Pre-Complaint Notice

Before filing a CCB complaint, all complainants must

provide notice of their intent to file

a CCB complaint to the contractor. The pre-complaint notice must be sent via certified mail to

the contractor’s last known address at the CCB at least 30 days before they file their CCB

complaint. There are no regulations with respect to what must be included in the pre-complaint

notice other than notifying the contractor that the complainant intends to file a CCB complaint

against the contractor. Please note that if a complainant follows the CCB complaint process for

the resolution of complaints involving work on Residential structures or certain small

commercial structures they do not have to also abide by Oregon's Notice of Defect law (see ORS

701.600(2)).

Deadlines To File CCB Complaints

In order to secure the right to receive payment from a CCB license bond, the complainant

must file their complaint with the CCB in a timely manner. All complainants must use the

complaint form provided by the CCB (which you can find on the CCB website). It is important

to note that a party cannot access a contractor's CCB license bond if the contractor was not

actively licensed with the CCB for at least part of the time they were working on the subject

project. If the complainant fails to file their complaint with the CCB within the following

deadlines, they will lose their right to receive payment from the contractor's CCB license bond.

The below deadlines apply to complaints against Residential bonds and Commercial bonds.

(1) For work relating to new structures, property owners must file their CCB complaint

within one year from the date the new structure was first occupied or within two

years of substantial completion of the structure, whichever is earlier;

(2) For work relating to existing structures, property owners must file their CCB

complaint within one year of substantial completion of the work;

(3) Employees must file their CCB complaint within one year from the date the wages

were earned;

(4) Suppliers must file their CCB complaints within one year of the date the materials

were sold;

(5) Subcontractors must file their CCB complaints within one year from the date their

work was completed;

(6) Primary contractors must file their CCB complaints relating to new structures

within 14 months from the date the structure was first occupied or two years after

substantial completion of the structure, whichever is earlier;

Chapter 10—Guide to CCB Bonds and CCB Bond Claims

10–5Issue Spotting for Construction Lawyers

(7) Primary contractors must file their CCB complaints relating to existing structures

within 14 months from the date the subcontractor substantially completed work.

Complaints against a CCB commercial bond must be filed with the CCB and the

contractor's bonding company before a court judgment is issued or a BOLI hearing is held.

Complaints against a CCB residential bond can be filed with the CCB either

before or after filing

in court. However, the timing of the filing of a complaint at the CCB may affect the

complainant's priority against a CCB license bond. As such, it is recommended that complaints

against residential bonds be filed at the CCB before they are file in court and that complaints

against commercial bonds be filed with the CCB (and the contractor's bonding company) as soon

as possible after filing in court. The CCB may charge a $50 processing fee to administer the

complaint. The CCB will notify the complainant sometime after the complaint has been filed

with the CCB if the complaint is within the CCB's jurisdiction and if the complainant is required

to pay the $50 processing fee.

CCB Mediation for Residential Complaints

For complaints involving Residential Structures or certain Small Commercial Structures,

the CCB may schedule one or more on-site meetings or telephone mediations between the

complainant and respondent for the purpose of reviewing the complaint items and discussing

settlement of the complaint. If the complainant has already filed a complaint against the

contractor in court, the CCB generally won't schedule a mediation unless both parties agree to

and request such a meeting—that's one of the reasons why parties who file CCB complaints

against Residential contractors often wait to file a lawsuit against the contractor until after a

CCB

mediation has taken place. The CCB generally does not conduct mediation for complaints

against CCB Commercial contractors.

Most of the CCB mediations involve complaints filed by Residential property owners. A

large percentage of CCB complaints are settled via CCB mediation. Sometime after the

complainant files their CCB complaint involving Residential property, the CCB will arrange for

a CCB mediator to facilitate mediation, whether it be at an onsite meeting or via a telephone

mediation. The CCB does not charge the parties for the services of the CCB mediator. If

settlement is reached, the CCB mediator will usually draft the Settlement Agreement while still

on site. If settlement is not reached at the CCB onsite meeting, the CCB mediator may issue an

investigation report which includes their observations and opinions. If the complaint is not

settled via CCB mediation, the complainant must go to court and obtain a judgment against the

contractor in order to secure the right to receive payment from the contractor’s CCB license

surety bond.

CCB settlement agreements may require the contractor to pay money to the complainant

or perform repairs or additional work as consideration for the settlement. In m

y experience, I am

generally wary of CCB settlements that require the contractor to perform repairs or additional

work. While the CCB mediator may assist the parties after a settlement agreement has been

reached with respect to repairs or additional work to be performed by the contractor as

consideration for the settlement, it is generally preferable (especially for the complainant) that

the settlement not require the contractor to perform repairs or additional work. Settlement

agreements drafted by a CCB mediator often state that the settlement is deemed to be a

Chapter 10—Guide to CCB Bonds and CCB Bond Claims

10–6Issue Spotting for Construction Lawyers

substituted agreement—meaning that if one party believes the other party to the CCB settlement

agreement failed to fulfill their duties and obligations under the CCB settlement agreement they

may only be able to sue the breaching party for breach of the CCB settlement agreement

(and not

pursuant to the underlying construction contract).

Complaint Process if Matter Not Settled at CCB Mediation

If a CCB complaint isn’t resolved via CCB mediation, the complainant must obtain a

judgment in court (pursuant to a small claims or circuit court judgment or an arbitration or BOLI

award) against the contractor in order to secure the right to receive payment from the

contractor’s CCB license surety bond. The complainant must file a certified copy of the

judgment against the contractor within 30 days of the final judgment.

If the complaint involves Residential or Small Commercial Property, the complainant

could receive a court judgment against the contractor before they file their CCB complaint, but

they file in court before filing their CCB complaint,

the complainant may lose priority against the

contractor's bond. As such, I generally recommend that if the complaint involves Residential or

Small Commercial Property that the complainant file a complaint against the contractor at the

CCB before they file a lawsuit or initiate arbitration. By doing so, the complainant may also

have the opportunity to participate in the CCB’s mediation process.

Priorities and Limits against CCB License Surety Bonds

Priorities against CCB license bonds are different for residential and commercial bonds. For

both residential and commercial bonds, the first complaint filed

in a timely manner with the CCB

establishes a priority period for all complaints filed against a contractor's CCB license bond

within 90 days of the first complaint filed against a contractor at the CCB. Thereafter, priorities

as to residential and commercial CCB license bonds are specified below.

Priorities for CCB Residential license bonds:

1. Complaints filed by owners of Residential and Small Commercial Structures against

Residential contractors have payment priority to the full extent of the bond over all

other types of complaints received by the CCB in any 90-day period.

2. If all complaints filed by owners of Residential or Small Commercial Structures don’t

exhaust the contractor’s Residential bond, the bond is available for payment for all

other types of complaints relating to Residential or Small Commercial Structures.

However, the total amount paid from any one Residential bond for non-owner

complaints may not exceed $3,000. In addition, if there are multiple non-owner

complaints filed within the same 90-day period, the $3,000 is pro-rated between the

non-owner complainants. Subcontractors and suppliers are often surprised to learn

that the most they can get from a CCB residential bond is $3,000 (or less if there are

multiple complaints filed within the 90-day period).

3. If the total amount payable for complaints that were filed within the 90-day period

doesn’t exceed the amount of the bond available for payment, the bond is available

for the payment of complaints filed in subsequent 90-day periods (in the same priority

as specified above).

Chapter 10—Guide to CCB Bonds and CCB Bond Claims

10–7Issue Spotting for Construction Lawyers

Priorities for CCB Commercial license bonds:

1. Complaints filed by persons furnishing labor to a Commercial contractor or amounts

owed by a Commercial contractor for employee benefits have payment priority to the

full extent of the Commercial bond over all other types of CCB complaints.

2. If complaints for labor or employee benefits do not exhaust the bond, then amounts

due as a result of all other types of Commercial complaints may be satisfied from the

bond.

3. If complaints for labor, employee benefits, and all other types of Commercial

complaints do not exhaust the bond, then complaints for costs, interest and attorneys’

fees resulting from Commercial complaints may be satisfied from the bond (costs,

interest, and attorney's fees are not available from Residential bonds).

4. If the total amount payable for complaints that were filed within the 90-day period

doesn’t exceed the amount of the bond available for payment, the bond is available

for the payment of complaints filed in subsequent 90-day periods (in the same priority

as specified above).

CCB Can Suspend Contractors Who Have Unpaid Construction Debt

While the license bond amounts required by the CCB for purposes of obtaining a CCB

license are fairly low and may not be enough to satisfy one or all complaints on a particular

project, there may still be reason for a person to utilize the CCB to assist with the recovery of

damages from a contractor. That is, if a contractor has unsatisfied construction debt (defined

as an amount owed under a judgment, arbitration award, or civil penalty that has become final

by operation of law arising from construction activities within the United States), the CCB

may revoke or suspend the contractor's CCB license. Furthermore, if the CCB were to revoke

or suspend a contractor's license for failure to pay construction debt, such action may also

cause the CCB to suspend or revoke other CCB licenses held by the owners, officers, and

members of the entity that failed to pay the construction debt.

Failure to satisfy construction debt may also cause the CCB to refuse to issue a new CCB

license to any owners, officers, or members of the CCB licensee who had unpaid construction

debt. As such, persons involved with a construction business that fails to pay construction

debt that was incurred while they were part of the business may not be able to obtain a new

CCB license (as an owner, officer, or member) until the construction debt from their prior

construction business has been satisfied

(assuming the debt wasn't discharged in bankruptcy).

I have had success assisting clients with the collection of damages from a contractor

because the CCB suspended, or threatened to suspend, the contractor's CCB license a result of

them failing to pay construction debt. When faced with the possibility of having their CCB

license suspended, or being unable to obtain a new CCB license, because of unpaid

construction debt, I have seen a number of contractors satisfy their construction debt so as to

avoid having their license suspended by the CCB. If their license is suspended by the CCB,

the contractor cannot legally perform work as a contractor in Oregon and can be penalized by

the CCB if they are caught performing construction work in Oregon without a license. In

Chapter 10—Guide to CCB Bonds and CCB Bond Claims

10–8Issue Spotting for Construction Lawyers

addition, a contractor cannot commence a lawsuit or arbitration for the performance of

construction work or file a construction lien if they weren't licensed with the CCB while

performing the work for which they seek compensation.

With respect to the CCB refusing to issue a new license to a person or entity who has

unpaid construction debt, the CCB application form requires all applicants to provide

information on their Oregon licensing histories and their licensing history in other states. Said

information must include the Oregon and other state licensing histories for any person

associated with the applicant who is, or has been involved as an owner, partner, officer, or

member in a construction business located in Oregon or another state. As such, the CCB may

refuse to issue a license to an applicant if they had unpaid construction debt, whether the debt

arose in Oregon or in another state.

CCB regulations require that a contractor send to the CCB a

copy of any final judgment

entered by a circuit court in Oregon against them, or by an equivalent court in another state, if

the judgment orders the contractor to pay damages that arose from breach of contract or

negligent or improper work and that relate to construction or proposed construction of a

Residential structure (but, remember the broad definition of Residential). The contractor

must

deliver a copy of the judgment to the CCB no later than 45 days after the final judgment

against them was entered, unless they pay the final judgment within 30 days from the date the

judgment was entered. The CCB regulations further state that in determining whether to

impose a disciplinary sanction for failure to report to report a final judgment, the CCB shall

give due consideration to any past or current attempts by the contractor to make payments

toward satisfaction of the judgment.

In my practice, if a client is granted a judgment against a contractor licensed with the

CCB (whether the judgment is issued in Oregon or another state), I normally send a letter to

the contractor shortly after the judgment has been entered notifying them of the CCB

regulations which require them to send a copy of the unpaid judgment to the CCB. I also

inform them that the CCB may revoke or suspend their CCB license (or refuse to issue a new

license to them) if the licensee owes construction debt and that their failure to satisfy the

construction debt will also likely affect any other CCB licenses held by the owners, officers,

or members of the licensee. I generally close the letter by notifying the contractor of the date

by which the judgment must be paid (i.e., 30 days after it becomes final), the 45 day deadline

by which they are required to notify the CCB if the judgment remains unpaid, and tha

t we will

promptly notify the CCB of the unpaid judgment if it hasn't been paid by the 45 day deadline.

If the contractor hasn't paid the construction debt within 45 days after the judgment

becomes final, I notify the CCB of the judgment. Upon notifying the CCB of the unpaid

construction debt, the CCB generally moves fairly quickly to take the steps to revoke or

suspend the contractor's CCB license. Otherwise, I may reach out to the contractor and

inquire as to what actions they are taking with regard to the unpaid construction debt owed to

my client and remind them of the CCB rules and laws regarding unpaid construction debt.

Chapter 10—Guide to CCB Bonds and CCB Bond Claims

10–9Issue Spotting for Construction Lawyers

Summary

The CCB complaint process can be an effective and efficient way to collect damages

from a contractor licensed with the CCB. Even though a contractor's CCB license bond may

not be enough to satisfy the damages stemming from their breach of contract or negligent or

improper work, one should not overlook the CCB and CCB complaint process as a means for

collecting from a contractor licensed with the CCB. In addition, the CCB mediation process

provides an inexpensive way for the resolution of complaints relati

ng to Residential and Small

Commercial Structures.

If a CCB licensee has unpaid construction debt, in most cases they will need to satisfy it

if they or the licensee's owners, partners, officers, or members desire to operate as a licensed

contractor in Oregon. If they fail to satisfy the construction debt in a timely manner, they risk

having their CCB license revoked or suspended. The CCB could also refuse to issue a new

contractor's CCB license

, or renew an existing contractor's license, for failure to satisfy unpaid

construction debt. That may be enough leverage to get your client paid even if the CCB

license bond wasn't sufficient to satisfy the judgment in favor of your client.

This article originally appeared in the March 2017 Construction Law Newsletter published by the

Construction Law Section of the Oregon State Bar. It was updated for the October 21, 2022 Oregon State Bar

Seminar titled Issue Spotting for Construction Lawyers, which was cosponsored by the Oregon State Bar

Construction Law Section.

Chapter 10—Guide to CCB Bonds and CCB Bond Claims

10–10Issue Spotting for Construction Lawyers

Chapter 10—Guide to CCB Bonds and CCB Bond Claims

10–11Issue Spotting for Construction Lawyers

Mediation is successful when both parties actively engage in the process.

Approximately 70% of disputes are resolved in this manner. The most successful

mediations occur when both parties arrive prepared, ready to participate, and have

direct authority to make final decisions. Please review the information below to

ensure the most successful mediation possible.

Mediation:

The mediation process is not intended to render a decision regarding fault. Rather it is designed to

bring both parties into a conversation and ultimately reach a successful settlement of the dispute.

Because of this, it may not be necessary to review the work in question. It is important to remain

respectful during the mediation process so that both parties can be heard. This ensures that the

mediator can understand the relevant facts and increases the likelihood of reaching an agreement.

Mediation Schedule

You will receive a call from the Mediator with the date and time for on-site mediations. you will also

receive reminders by email, text, or phone.

Settlement Agreement

If a settlement is achieved the mediator will prepare a written agreement that captures the terms for

both parties to sign. Settlement Agreements are created and signed at the time of mediation for on-

site mediations or they are emailed to both parties for telephone mediations. Settlement

agreements are binding contracts. Both parties may be bound by the terms of the agreement,

therefore, a breach of the settlement agreement is handled in court and may also result in a license

suspension for the contractor.

What happens if mediation is not successful?

If settlement is not achieved during mediation, a Dispute Analyst will send the claimant a notice to

file in court. If a claimant does not file in court in a timely manner, the file will be closed. The file

may only be reopened within 60 days of a closure and must have a court filing. Small Claims court

has a $10,000 limit while Circuit Court does not have a limit. In many cases a Circuit Court filing may

require an attorney and the bond cannot pay attorney costs.

Consumers can only access payment from a bond when they have obtained a certified judgement in

their favor that goes unpaid by the contractor.

Bond payout will take at least 60 days from the date CCB receives a certified judgement if multiple

claims are filed within the same 90-day period, payment may be held until resolution of all claims.

Chapter 10—Guide to CCB Bonds and CCB Bond Claims

10–12Issue Spotting for Construction Lawyers

This is to avoid a “race to the bond” and increases the likelihood of recovery to similarly situated

claimants.