Fight The Nevada State Contractors Board

FIGHT THE NEVADA STATE CONTRACTORS BOARD – AND WIN!

Many people believe “you can’t fight City Hall” and when confronted by an investigation or complaint issued by the Nevada State Contractors Board, they give up and don’t fight back, allowing the Board to order “corrective” work that is unnecessary or issue fines or worse, suspend or even revoke their licenses. That’s a huge mistake. The Board gets it wrong – a lot of the time – and you can take action to fight back and protect you reputation and assets. Here are just a few examples of cases The Wright Law Group, P.C., has undertaken and beat back the Board’s overreaching, its abuses, and its simply ‘getting the law wrong’.

Knowingly Entering into A Contract with an Unlicensed Contractor

In this first case, the Board charged the client with “Knowingly Entering into A Contract with an Unlicensed Contractor” a violation of NRS 624.3015(4). The client was adamant that it was unaware that the subcontractor it had hired was unlicensed. Yet the Board claimed, under its interpretation of the law, this didn’t matter. The Board claimed that the client had an affirmative duty to check the credentials of the subcontractor before hiring. While this may be a prudent thing to do – it is not what the law requires. The Board tried to expand the clear language of the statute to create an extra duty on the client that did not exist. It did this by misconstruing another statute, Nev. Rev. Stat. Ann. § 624.024 which states:

“Knowingly” imports a knowledge that the facts exist which constitute the act or omission, and does not require knowledge of the prohibition against the act or omission. Knowledge of any particular fact may be inferred from the knowledge of such other facts as should put an ordinarily prudent person upon inquiry.

The Board argued that all the client needed to know is that it was entering into a contract, not that the other party was unlicensed. This is an absurd assertion because, no one can “accidentally” enter a contract- all contracts, to be contracts, must be knowingly entered. The Board was setting up a “per se” rule rather than having to prove actual knowledge. No, this statute means exactly what it says- you must know you are entering into a contract with an unlicensed contractor, and it is the Board’s duty to prove it. That’s a hard standard and so the Board and its lawyers simply tried to bully the client into taking a deal. No chance. We took this case to trial and won. In dismissing the case, the Board’s own Hearings Officer ruled as follows:

Here, The Hearings Officer Got It Right and Dismissed The Case

As applied in this case, it is not enough to show that Respondent knew [DOE] was unlicensed. And it is not enough to show that [DOE] was in fact an unlicensed contractor. The Board must prove that Respondent know [DOE] was in acting as an unlicensed “contractor.” NRS 624.3015(4) (“knowingly entering into a contract with a contractor while that contractor is not licensed,”) (Emphasis added). A mere agent not engaging in construction activities is not a contractor. NRS 624.020.

Here, the Hearings Officer got it right and dismissed the case. The client’s name is not provided here because we kept his record clean, and it remains so. There is no indication on the Board’s website that this client was ever even cited and that’s what you should be aiming for to protect your business.

However, the Board’s Hearings Officer doesn’t always get it right either. If that’s the case and you lose your case in front of the Board – do not despair. Contact us immediately. You can appeal the Hearings Officer’s decision to the District Court on what’s called a Petition for Judicial Review. That’s what happened in our next example.

The Wright Law Group To Appeal A $20,000 Fine

In this case, the Client hired The Wright Law Group to appeal a $20,000 fine and a finding that it had entered a contract more than its bid limit. The Client, a government contractor, had signed a Master Services Agreement (MSA) with the Nevada Department of Transportation. A MSA is essentially, the boilerplate language contained in most contracts – but it contains no actual agreement to provide any work. It just sets forth the general conditions IF, in this case NDOT, required work in the future via work order or purchase order. The MSA indicated a budget for NDOT – a cap that, when all work orders are added together, could not be exceeded.

The Board determined that the budget was an actual contract amount and the MSA a contract. This is wrong and the Hearings Officer got it wrong too. This is such a basic contract law question that it really should not have gone any further. But the Board, in its arrogance and bullying nature, prosecuted the client anyway. In so doing, The Hearings Officer made another huge error, claiming the service area of the MSA (the whole of Southern Nevada) constituted a “single” work cite.

The District Court Judge ruled the Board’s Hearing Officer (and the board) got it all wrong. The Judge wrote in her order reversing the Board’s Ruling:

The Master Service Agreement is a document that establishes the potential scope and unit pricing which will be used in the issuance of separate “stand-alone” work order agreements, the actual cost of which must be negotiated and agreed upon before any future tasks can be performed. The Master Service Agreement is therefore, an agreement to enter into separate but distinct stand-alone agreements at a later date and time, at an agreed upon hourly rate. It is an agreement to agree – but not a contract.

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Here, Southern Nevada is service area, the range of geographic area within which the contractor agrees it may be tasked to perform task orders. But the whole of Southern Nevada is not the work site. A person of ordinary intelligence would conclude that the work site is where work is being performed, not the service area. One would need to check their common sense at the door in coming to any other conclusion. By claiming the entire Southern half of the state a work site, and ignoring the each task order which directs the contractor to a specific location as the work site, the Board misinterpreted NRS 624.220(2) and enforced the statute indiscriminately.

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IT IS HEREBY ORDERED THAT the Petition for Judicial review is GRANTED in whole. The Nevada State Contractor Board is directed to immediately return to Petitioner all fines, fees and costs paid to the Board relative to the Administrative Citation. In Addition, the Board shall strike and remove all reference to the Citation from the Petitioner’s file and the Board’s Website, such that any no negative inference may be drawn therefrom and shall take all other necessary action to effectuate the purpose of this Order which is to clear Petitioner’s record of this erroneous violation.

(Eighth Judicial District Court Case NO. A-24-895566-J, filed 1/29/25).

The Client Has Got Its Money Back

So, in this case, the Court found the Contractors Board doesn’t know what is or is not a contract. That’s bad. Further, it acted without common sense and indiscriminately in its application of the very statutes it is charged with enforcing. Thus, the point is, the Board is not infallible, and it is not unbeatable. The client has got its money back and we are pursuing our attorneys’ fees from the Board.

Sometimes, however, the Board simply needs to be sued to be compelled to do the right thing. This happened in our next example.

The client was a former Manager and Qualifier for a contractor that had gotten into serious trouble with the Board. However, the individual former Manager got pulled into the case. As you may know, NRS 624 allows the Board to assess Managers and others with Joint Responsibility- meaning personal liability- for the contractor’s fines and discipline. In this case, the client had resigned from the company years prior to the complaint, but the Board had refused to make the appropriate changes to the license, even though it was timely informed of the change. This was because the Board has an unwritten policy that it won’t make changes to the status of a license (like monetary limit or change of officer) if there is any pending investigation – no matter how small. At the time there was an investigation into a minor workmanship issue. As a result, the Board dragged this individual into a disciplinary action trying to hold the client responsible for $400,000.00 in fines assessed against the company!

This unwritten policy is illegal. The Board must perform its administrative functions and cannot refuse to do so based on some unwritten policy. This is called ad hoc rulemaking, and it is entirely improper for a government agency.

Even the Nevada Attorney General has weighed in on these kinds of practices: The Administrative Rulemaking, A Procedural Guide, (Tenth Edition) published by the Nevada Attorney General in 2023, addresses the rule against ad hoc rule making as follows:

The Legislature granted agencies authority to create regulations that have the force and effect of law. To ensure public access and fair notice to the public, agencies must diligently follow the process created by the Nevada Administrative Procedure Act (“APA”) when creating regulations. Agencies must also be vigilant against inadvertent ad hoc rulemaking. Stating an official position on an interpretation question or setting a standard or definition without following the rulemaking process is considered ad hoc rulemaking and must be eschewed. In short, any standard or policy that affects the general public, such as requiring or prohibiting conduct, must be made by the formal procedure for promulgating regulations.

The Wright Law Group Filed A Special Type Lawsuit In District Court

Rather than wait for the Hearings Officer to rule on the issue, and possibly get it wrong, The Wright Law Group filed a special type lawsuit in District Court called a Petition for a Writ of Mandamus, requesting the Court to order the Board to change its files retroactively to reflect the correct manager and eliminate our client from the disciplinary action.

The Board’s reaction to the lawsuit was immediate. Rather than be publicly ordered to cease its unlawful action, it offered to make the changes to its files retroactively AND dismiss the disciplinary proceeding against our client along with the claim to $400,000.00 in fines – if we dismissed the lawsuit. Thus, sometimes, the Board simply needs to be put in its place to get justice.

The thing to remember is that the Board likes to push its weight around and usually gets what it wants because there is no push-back. We push back – hard.

John Henry Wright, Esq., has been practicing law for over thirty years and has appeared before the Board for decades. He had a background in construction litigation and criminal defense, making him the ideal attorney to defend you and act against the Board. He is well known by the Board and has earned its respect.

Not every case requires a trial, appeal or lawsuit to resolve. Many can be resolved with a letter or a few phone calls. Knowing which action to take makes all the difference.

Call to talk to Mr. Wright about your case, controversy or issue with the Board at 702-405-0001. You can also Email Us

Fight Nevada Contractors Board And Win