Thread: Texas recovery fund revokes HI's license

A customer got a judgement against a local inspector for thousands. TREC put him on probation for two years, now after those two years they're also gonna revoke his license if they pay the claimants any money out of the "inspector recovery fund". I'm not sure what he did, but, that situation doesn't sound fair. I thought that's what the fund was for (to pay what the inspector can't). That story leaves me feeling very vulnerable and somewhat hopeless.

I'm not a lawyer by any means, but laws and lawyers are abundant for those who wish to pursue frivolous claims, yet no protection for the small business without tapping into the insurance.

I'm wondering, is there any right a Texas inspector, or for that matter, a construction professional has to inspect a property not standardized nor regulated by TREC legally? Also, is there any club, coalition (not Nachi or ashi etc) of independent RE appraisers and inspectors that pay a little every month into a community pot to help for legal expenses?

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John, the recovery fund is to protect the consumer, not TREC, and not the inspector. The recovery fund will only pay if you or your insurance don't pay the consumer. And then you get to pay the recovery fund back or lose your license.
That is the purpose of insurance, to cover your (ass)ets when you get sued. This is simply a cost of doing business here or anywhere else. My advice is to take the money you plan on spending and set up a savings account and put the money into it and five or ten years after you get out of the business you can pay for a nice vacation if you never had to use the fund. Other than that, do such a good job that you don't get sued.

That story leaves me feeling very vulnerable and somewhat hopeless.

JW: You mean this guy?

Smith, Larry
(Spring); License #150
Agreed revocation of professional inspector license fully probated for 2 years, effective October 12, 2009; payment of $12,500.00 made from the Real Estate Inspection Recovery Fund toward satisfaction of a judgment as authorized by �1102.402 of the Texas Occupations Code

You are at their mercy.

I'm not a lawyer by any means, but laws and lawyers are abundant for those who wish to pursue frivolous claims, yet no protection for the small business without tapping into the insurance.

JW: You have the Republicans to thank for that.

I'm wondering, is there any right a Texas inspector, or for that matter, a construction professional has to inspect a property not standardized nor regulated by TREC legally?

JW: Yes. TREC only has authority over inspections made during the (re)sale of buildings associated with real property. The recent AG opinion is stated so nebulously as to allow the TREC to rewrite the SOP to include new construction inspections. It is my belief that they are headed in that direction. However, at least for the time being, if there is no sale or resale contract involving the property in question, the TREC has no jurisdiction.

Now, since I am not an attorney (the world can heave a collective sigh of relief), I cannot assure you that any of the above is fact. But, I believe it to be true.

"JW: You have the Republicans to thank for that".

I am sure that there were some Demoncrats mixed in there somewhere as well.

Republicans to blame?

Let's see, this new government (Democrat) is all about unjustified entitlements, and self-proclaimed anti-capitalism. I'd say the Republicans are nowhere near that description.

What do I know. I'm just an old school Democrat looking from the inside soon to leave.

Originally Posted by John Watson

Republicans to blame?

Let's see, this new government (Democrat) is all about unjustified entitlements, and self-proclaimed anti-capitalism. I'd say the Republicans are nowhere near that description.

What do I know. I'm just an old school Democrat looking from the inside soon to leave.

JW: Before you shoot off your mouth where you shouldn't you might want to do a roll call count of the senate and house in Texas. You will find that they are predominately Republican. Then, instead of talking the same old Republican trash you were raised to talk, do a little research. Stop watching TV. Find something else on the radio to listen to other than Rush Limbaugh. Grow up.

By the way, and back to the original topic, ask for a show of hands at the TREC. Republicans all.

Well, here we go again.
Can't we all just get along?

Originally Posted by Michael Carson

Well, here we go again.
Can't we all just get along?

MC: Yes, we can. And I have a few suggestion as to just exactly where the Republicans among us can get along to.

A.D, Your callous response is one of the key ingredients as to my leaving the Democratic party. You basically told me, a fellow member of your own party, to go F@#K myself for having a dissenting opinion. You also suggested quit watching T.V and listening to the radio. Shall I get my news from Moveon.org? You truly are a wise man.

Originally Posted by A.D. Miller

JW: Before you shoot off your mouth where you shouldn't you might want to do a roll call count of the senate and house in Texas. You will find that they are predominately Republican. Then, instead of talking the same old Republican trash you were raised to talk, do a little research. Stop watching TV. Find something else on the radio to listen to other than Rush Limbaugh. Grow up.

By the way, and back to the original topic, ask for a show of hands at the TREC. Republicans all.

OK. So Bagdad Bob live in a Republican state And i live in the most Liberal state... How did we get this back-wards Bob?

Best

Ron

Originally Posted by John Watson

A.D, Your callous response is one of the key ingredients as to my leaving the Democratic party. You basically told me, a fellow member of your own party, to go F@#K myself for having a dissenting opinion. You also suggested quit watching T.V and listening to the radio. Shall I get my news from Moveon.org? You truly are a wise man.

There is no and should be no such thing. You must vote your mind for your reasons behind a multitude of ideas and principals. If not, you or anyone else is not the intelligent man they think they are.

The thing that scares me the most is AD being a Democrat/Liberal (that is with a capital letter in front of both) through and through no matter what.

The reason it scares me so much is because he is an intelligent man. Well schooled and well read. For someone with his standings to blatantly follow a party no matter what ?????????????????????? Need I say more.

With this whole health care and taxation and and and and that the Dems are pushing so stronly for just for the sake of principal ???????? And to think I use to pretty much be and vote for the democratic party. This is absolutely shameless. What AD does not appear to realise is that someone (2 of those someones---him and his wife) are going to have to pay for all this

If you think this is the wisest moves the country has aver made.....Think about this. Britain, France etc etc etc have tax reates for the typical schmo of about 50%..............................That is what this country is heading for with in the next 10 years.. Next month the billions and trillions are coming due....No money to pay for it. The destruction of a free market economy. Lets see. Before I get to have any of my money I must first pay 50% of the gross out first. The 50,000 a year man just became a 25,000 dollar a year man.....before he even pays out everything else before buying groceries.

Originally Posted by John Watson

A.D, Your callous response is one of the key ingredients as to my leaving the Democratic party. You basically told me, a fellow member of your own party, to go F@#K myself for having a dissenting opinion. You also suggested quit watching T.V and listening to the radio. Shall I get my news from Moveon.org? You truly are a wise man.

JW: I am also no Democrat. I like to do my own thinking.

I did not basically tell you to go fucck yourself. I have no problem telling anybody anything, and do not need you to do my talking or writing for me.

Get your information from wherever you will, just don't pretend that the Republican party is not responsible for the lack of true tort reform in Texas, or elsewhere.

Have a happy holiday.

-----

Here's wishing a Merry Christmas to one and all.

Ahhhh The fruits of licensing, tasty in a bitter & sour kinda way.

A.D,

You are right about not just the lack or even effort for tort reform. Too many lawyers hold office and work hard to protect their special interest. The new health bill for instance, insurance companies love it as well as the attorneys rubbing their hands for more suits and claims.

Originally Posted by John Watson

A.D,

You are right about not just the lack or even effort for tort reform. Too many lawyers hold office and work hard to protect their special interest. The new health bill for instance, insurance companies love it as well as the attorneys rubbing their hands for more suits and claims.

JW: Agreed. 44% of the legislators, both state and national, are millionaires. Not coincidentally, nearly the exact same number are lawyers.

So the problem with the Texas Legislators may not be a Republican/Democrat thing maybe it is because they are mostly just LAWYERS U.S. National Debt Clock : Real Time - A ticking timebomb

May be James has a point there: lawyers seem to be mixed up in a lot of the trouble people are having these days. Now, some lawyers are good folk. But the ones that aren't sure seem to know how to make life living hell. Look what Ralph Nader has done for us, as an example. And, we could even look to the Oval Office to see what lawyers do for us when in positions that they feel give them the power to dictate to the People how they will live. And may be that is really the problem: too many lawyers seem to think that the rest of us can't think for ourselves, are too stupid to solve any problems, and are just plain worthless, unless we have money they can extract from us.

I am amazed how this topic string started and has developed.

The Fund doesn't revoke anyone's license, and the HI's license was and is NOT REVOKED.

Carrying on about nuisiance suits, tort reform, the poor HI, TREC and the Home Inspector Recovery Fund.

A few facts.

License #150 is listed as "active" status. His license is NOT revoked, he has a probation and up to Oct 2011 to finish paying back the Fund, and can continue to perform Real Estate Home Inspections during his probationary status.

Larry Smith wasn't "just" a licensed HI - he apparently also held a RE license at the time of the case/cause (Lic. Nbr 209689 same DOB and home address) and promoted himself as also a Pest Control applicator and WDI inspector. He was advertising and promoting his business activities using a business address (with various "errors" in same) he had vacated long before the filing of the complaint. He still does ( GlenCo Professional Home Inspections, Pest Control Services, Termite Treatments ) the difference being he changed the contact voice number to the phone number he formerly advertised as his fax number.

Advertising and operating under an Assumed Name/DBA (Glenco Home Inspections) no identification of true name of licensed party or license number, without proper identification and use of the TREC seal, a host of other rules violations in that area on his site, but not what this case was about. According to the service reports - Mr. Smith had vacated the business address still being advertised to this day more than four years prior - well in advance of the date of the activity that lead to the filing of the cause.

Larry Smith was sued. The Original Petition was filed (also Jury Demand, etc.) back in March of 2005, he was personally served (filed 4/25/05). He was not the only defendant, A.J. & Evelyn Burch were sued as well.

Neither Smith nor the Burches filed an appearance, response or defense. The case was directed and default judgement in July 2006. Larry Smith continued to ignore the case. Had no attachable assets that could be found.

Findings were on the Deceptive Practices, common law fraud, and negligence case included:

Originally Posted by order

1. On the claim of Common Law Fraud, the court finds in favor of Plaintiff, Crystal Butler, and against Defendants, A.J. Burch and Evelyn Burch, jointly and severally in the amountof $50,000.

2. On the claim of Breach of Contract, the court finds in favor of Plaintiff, Crystal Butler, and against Defendants, A.J. Burch and Evelyn Burch, jointly and severally in the amount of $14,875.42.

3. Plaintiff, Crystal Butler, is entitled to prejudgement interest on the damages awarded herein, measured from March 10, 2005, at the rate of 5.5% per annum, in the sum of $865.23.

4. On the claim of Negligence, the court finds in favor of Plaintiff, Crystal Butler, and against Defendant, Larry Smith d/b/a Glenco Homes, in the amount of $14,875.42 in actual damages, plus $1,064.00 in lost wages.

5. Plaintiff, Crystal Butler, is entitled to prejudgement interest on the damages awarded herein, measured from March 10, 2005, at the rate of 5.5% per annum, in the sum of $927.07.

6. Plaintiff, Crystal Butler, is entitled to postjudgment interest on the total amount of the judgment and any prejudgment interest awarded hereinabove, at the rate of 5.5% per annum from the date this judgment is signed until paid.

7. Costs are hereby taxed against Defendants in the amount of $472.56.

IT IS ORDERED that Plaintiff, Crystal Butler, is entitled to enforce this judgment through abstract, execution and any other process necessary.

Signed (& filed) on July 5, 2006.

Despite the fact that the parts of the judgement directed to the Burches was in excess of $65,000.00 they settled, without admitting liability, and paid ONLY $9,000.00 on the perfected judgement, and were released, on November 27, 2007 (Smart move huh?).

Smith on the other hand, continued to ignore the case.

The judgement against Smith for actual damages was $14,875.42 plus $1,046.00 for lost wages, $472.56 for recoverable costs ($16,393.98); PLUS pre judgment interest of $927.00 (& plus post judgment interest of 5.5% (at the time the judgment was signed in July 2006 that totaled $17,320.98), additional lien perfecting filing, serving, etc. costs and over $3,000 in additional legal fees was sought for post judgment collection plus post judgment interest as of April 1, 2008. Smith continued to ignore, never filing or at that point paying a thing. No attachable (non-exempt) assets could be found for Smith by the Clerk or counstible, and the writ for execution was returned Nulla Bona in late March 2008. By April 1 2008 the judgment, post judgment interest, and additional fees and costs of perfecting the lien filing, collection, and court activites had totalled approx. $22,000 before the next filing or court appearance.

Hearing and award finding no attachable assets to pay the judgment the Petitioner filed for recovery from the Fund with TREC and the Court; with the Atty General representing TREC, settled with the Petitioner for $12,500.00 to be paid from the Recovery Fund, for the judgment against Smith d/b/a Glenco Home Inspections, signed off by the Judge August 8, 2008. Technically the Recovery Fund owns the judgement against Smith now - if Smith wants to work he has to repay the debt. TREC and the AG did a service - Smith didn't even try to defend the suit, settle the judgment, or anything. TREC via the AG reduced the amount to $12,500 net - thats 76% of the out of pocket original judgment, stripped of pre-and postjudgment interest, no legal fees to get the judgment, all subsequent costs, and no fees or costs of collection. Net nearly nothing to the petitioner - yet $3,500.00 MORE than the Burches paid (with a higher judgement) back in November 2007.

Originally Posted by ORDER DIRECTING PAYMENT ON VERIFIED CLAIM - as to Larry Smith d/b/a Glenco Home Inspections

On the 16th day of July 2008, came to be heard in the above-styled and numbered cause Plaintiff's Verified Claim upon the Real Estate Inspection Recovery Fund maintained by the Texas Real Estate Commission for payment of Plaintiff's judgment signed on July 5, 2006. Plaintiff appeared by her attorney, Byron W. Boenig, and the Texas Real Estate Commission appeared by its attorney, the Attorney General of Texas.

The Court finds that it has jurisdiction of the parties and of the subject matter before it and that proper and sufficient notice of this claim was given to all parties.

The Court finds that the Judgment Debtor herein, Larry Smith, was duly licensed as a professional inspector by the State of Texas at the time the acts complained of in Plaintiff's petition were committed.

The Court finds that the acts complained of in Plaintiff's petition and upon which the judgment in this cause is based violated 1102.301, Texas Occupations Code.

The Court finds that the judgment is based on facts allowing recovery under Subchapter H, Chapter 1102, Texas Occupations Code.

The Court finds that the Plaintiff has obtained a judgment payable out of the Real Estate Inpsection Recovery Fund pursuant to Section 1102.358, Texas Occupations Code for actual damages in the amount of $12,500.00.

IT IS THEREFORE ORDERED by the Court that the Plaintiff have and recover from the Real Estate Inspection Recovery Fund the sum of TWELVE THOUSAND FIVE HUNDRED NO/100 DOLLARS ($12,500.00). The Texas Real Estate Commission is hereby ordered to pay such sum to Crystal Butler, Plaintiff. Plaintiff is hereby directed to assign to the Texas Real Estate Commission all her right, title and interest in the judgment to the extent of payment.

Signed this 8th day of August, 2008.

Setting all else aside, the first moral of this story is - don't ignore a case/cause filed against you, and even if you do and suffer a default judgment - don't continue to ignore it, negotiate a SETTLEMENT and RELEASE without admitting liability and a confidentiality clause like the other parties did: But if you do all that ignoring, and want a free negotiator to reduce your liability and a repayment plan for that reduced liability and keep working, do it in TEXAS.

As far as all the carping about the Recovery Fund, its there for THE CONSUMER, but TREC and the Recovery Fund system works to AID or BENEFIT the cash-strapped liable/negligent (finding by the court) HI: this case might be a text-book or PRIME EXAMPLE of how this is so. Larry Smith never even defended this case - perhaps even trying may have exposed even more liability regarding his activities, who knows? However, to fail to even try to negotiate a settlement post judgment, apparently made the net debt (to the Fund) worse than it might have been (based on the similar actual damage award plus $50,000 against the Burches wherein they settled post judgment for only $9,000.00). It is not a windfall, the damaged claimant, Ms. Butler didn't even get close to a full recovery of her actual damages originally assigned to Mr. Smith from the FUND, and was further less out of pocket court costs, filing costs, service costs, etc. as well as fees and costs post judgment, received more than two years after the original judgement, more than three years after her case was filed, and even longer since the actual instance (basically the same settled amount from the Burches ($9,000) plus most of the additional legal fees and costs ($3,500 according to verification filed prior to the July 2008 hearing) associated with the post judgment activities).

Do I feel "sorry" for Larry Smith? Nope, not one bit.

Should you? I don't think so, its been more than four years since the liability and the debt still hasn't been fully paid yet, he can still do HIs and has the balance of the 2 years (Oct 2011) to pay it back to the Fund, seems to me that's six years, no interest, and allowed to keep working without the expense of defending a claim! Where else besides in Texas does the State (Attny General) negotiate down your liability, get the 4 years plus of interest removed for the liability, the fees and costs removed, on your behalf, and float you another 2 years, while you are free to keep inspecting and earning an income?

Seems a darn good deal for the Licensed Texas Real Estate Home Inspector in this case, to me!

I really don't see what the complaining or worry is about, and all this Republican/Democrat and other carrying on seems way off base.

http://www.trec.state.tx.us/pdf/meet...mn20080630.pdf
Bottom of page 2:
Chairman Eckstrum moved to agenda item eight, discussion and possible action to authorize payments from recovery funds or other action on items considered in executive session. Ms. Bijansky, Assistant General Counsel, presented the recovery fund claims for possible payment as follows:
IRF 08-001, Crystal Butler vs. Larry Smith, in the amount of $12,500 in actual damages. Mr. Day, duly seconded by Mr. Mesa, moved to authorize payment. The motion was adopted by unanimous vote.

http://www.trec.state.tx.us/pdf/repo.../sr2009_10.pdf
Bottom of page 8 E2 report October 2009 and http://www.trec.state.tx.us/complain...cificMonth.asp (October 2009):
Smith, Larry
(Spring, Tx);
License #150
Agreed revocation of professional inspector license fully probated for 2 years, effective October 12, 2009;

Payment of $12,500.00 made from the Real Estate Inspection Recovery Fund toward satisfaction of a judgment as authorized by §1102.402 of the Texas Occupations Code



Cause 200516540, Filed 3/10/2005, Court 270, Civil, Type of Action: DTPA - Deceptive Trade Practice: Harris District Clerk. The 2005 activity (including the original petition) is not scanned.

Originally Posted by John Watson

Jerry,

Do you have a "standards of practice" for inspectors in your state? Is licensing required there as well?

We have all that here, and yes safety is standard, but over-zealousness is not. Before I'm an inspector, I'm a business man. I sure as hell would not let one of my inspectors decide on his own to report lack of AFCI breakers on a home built before 2005 or wired with aluminum if it's not in our state standards. My business doesn't just do homes, we inspect commercial properties too. I would be out of business quick if I reported everything that may be dangerous that wasn't without question or mandated. I'm glad we have standards here.

I don't know any other trade or business where other colleagues criticize and label one another as bad inspectors. I'm not worried about whether other inspectors think I'm qualified or not. What I am, is embarrased that on blogs like active rain, I never see realtors who's education and licensing is half of what's required of ours, do to each other what you do here, especiallly to someone new like me.


Some of you need to take that stick out of your ass after riding that tall horse and quit passing so much judgement like little girls pass notes in class.

That being said, Have a nice day.

You said that shortly after you started here. "Glass houses" & "throwing stones" -- enough said.

Originally Posted by John Watson

A customer got a judgement against a local inspector for thousands. TREC put him on probation for two years, now after those two years they're also gonna revoke his license if they pay the claimants any money out of the "inspector recovery fund". I'm not sure what he did, but, that situation doesn't sound fair. I thought that's what the fund was for (to pay what the inspector can't). That story leaves me feeling very vulnerable and somewhat hopeless.

I'm not a lawyer by any means, but laws and lawyers are abundant for those who wish to pursue frivolous claims, yet no protection for the small business without tapping into the insurance.

I'm wondering, is there any right a Texas inspector, or for that matter, a construction professional has to inspect a property not standardized nor regulated by TREC legally? Also, is there any club, coalition (not Nachi or ashi etc) of independent RE appraisers and inspectors that pay a little every month into a community pot to help for legal expenses?

John Watson,

You've got "the story" ALL WRONG, on many levels.