A majority of states now have some form of a “notice and opportunity to repair” statute (“NOR statute”) for construction defect claims. The statutes generally provide that before filing suit a property owner must provide a contractor with notice of the alleged defect, the opportunity to inspect the property, and the opportunity to offer to repair the issue. If a property owner fails to follow the procedure, the statutes generally provide that a defendant can stay the suit until the owner satisfies the procedure.
A recent decision from Wisconsin indicates that it is not enough to just file a motion to stay when an owner initiates suit without having complied with a NOR statute. A contractor should also file an answer or other responsive pleading. Otherwise, the contractor risks having the court enter a default judgment against it.
In Schunk v. Rock & Tait Exteriors, LLC, Appeal No. 2016-AP-2497, 2018 WL 2229365 (Wis. Ct. App., May 15, 2018), the plaintiff filed suit alleging a breach of contract related to the defendant’s replacement of the roof on his home. In response the defendant filed a motion to stay the suit until the plaintiff complied with Wisconsin’s notice and opportunity to repair statute and did not file an answer. The plaintiff moved for and the court entered a default judgment. On appeal, the defendant argued that the motion to stay under the NOR statute was a responsive pleading raising an issue of law. The Wisconsin Court of Appeals upheld the default judgment and rejected the defendant’s argument, reasoning that the motion to stay “did not join an issue of law” because it did not dispute any of the allegations in the complaint.
For more on notice and opportunity to repair statutes: Elliotte Quinn, “So Sue Me!”: The Intersection of Notice and Opportunity to Repair Statutes and a CGL Carrier’s Duty to Defend, Why Courts Likely Will Continue to Find the Duty to Defend Triggered, and Why Carriers May Not Need to Be Concerned About This Development, 52 Tort Trial & Ins. Practice L.J. 119 (2016).