Construction Industry Advocates: Michael J. Holden Assists Legislative Push to Protect Owners and Qualifying Parties of Arizona Contractors
Holden Willits managing member Michael J. Holden was instrumental in the successful effort to revise Arizona’s contractor licensing statutes to clarify that owners and qualifying parties are not individually liable in civil lawsuits for violations by a licensed company. The change was needed in the wake of articles published by law firms suggesting that owners and qualifying parties could be sued individually under the 2019 amendments to the contractor licensing statutes, which provided that a qualifying parties or person named on a license is “responsible for any violation” of those statutes. While it was not clear that a court would adopt that interpretation of the 2019 statutory changes, the prospect of personal liability in civil court for no reason other than simply being named on a contractor’s license needed to be addressed. After the issue came to the attention of the construction industry in February 2021, Mr. Holden drafted the statutory amendment and worked with the Arizona Builders Alliance and its lobbying firm Triadvocates in getting the amendment passed with lightning speed. The bill sailed through the Senate and the House with NO OPPOSITION, and Governor Ducey signed HB2670 into law on April 28, 2021—only 68 days after the issue was first raised. This change will go into effect 90 days after the end of the 2021 legislative session. The bill also includes a “legislative intent” section that explains the amendment was made to clarify (rather than change) the statute. This should prevent anyone from arguing that the statute was ever intended to impose personal liability.