Thread: Insurance company needed for "Summons and Complaint"?

Well, I got a "Summons and Complaint" today from my client's lawyer for an inspection I did during the winter months. In this complaint, they are suing me, the sellers, the buyer's Realtor, the realty company and the home warranty company.

In this complaint, many (if not all) the items are ridiculous. For example, they have written that the air conditioner did not operate properly. It was winter with snow on the ground and I wrote that up as a limitation. Second is the electrical panel was not grounded which I wrote up and the service box needed to be upgraded which we put down that the electrical box is a Federal Pacific and further evaluation by an electrician is needed due the the problems that have been noted about this type of panel. Even though we have written in the report that we do not test the temperature control on the oven, they have it down as something we neglected to inspect.

Where I'm going with this is that most (if not all) the items noted in the complaint are clearly items that we reported as problems or were written as limitation plus they did not inform me of any problems in writing as written in the contract. Do I need to submit this information to my insurance company or is there a way for me to take care of this myself.

I know there a few of you HI guys that do not have E&O and I was wondering how you would handle this.

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I feel for you man, that is something that makes my stomach knot-up when the thought of a law suit crosses my mind. Maybe because I have never been sued, and only threatened a few times, most of those by the sellers for basically being to thorough.

This sounds like one of those shotgun suits that only helps the lawyers.
Probably got PO'd at the warranty company cause they denied their claim.

Questions to ask yourself:
Did they sign an inspection agreement?
Did they abide by the terms?
Does your report adequately deal with anything mentioned in the notice?
Did you talk to your lawyer?
Have you talked to the client? What do they want? (talking to them may or may not be the right thing, ask your lawyer)

Things to do:
Take a deep breath and get on with life, this is just one more hurdle.

Good luck!

If you are in receipt of a summons, you need to notify your E&O Providor (in most cases a requirement of the policy). Failure to notify may result in a denial of coverage.

Yep, do as Joe has said. Get all of your papers together and contact your insurance company. They will tell you what to do.

I expect that we will be seeing more frivolous lawsuits like this as folks start having a hard time making their house payments. They are looking for ways to get out of their mortgage payments.


Good luck.

FYI!! I would not post any more information about this lawsuit on this board or any other board.

Originally Posted by Scott Patterson

FYI!! I would not post any more information about this lawsuit on this board or any other board.

Agreed. Active Claims should not be discussed in Open Forums.

I agree with all.

Even when a claim seems small, you should notify your E&O carrier.
They will explain this to you, it seems many claims that start out small end up growing as the clients lawyer and blown out of proportion estimates get added on in hopes of a windfall.

Failure to notify promptly will cost you all future claims that may arise with the house.

I have no exp. with this, just had a long chat with two different ins. providers this year.

Did they sign an inspection agreement?

Yes

Did they abide by the terms?

None of them

Does your report adequately deal with anything mentioned in the notice?

Yes to all but they mentioned about an extension cord used for a hanging light fixture.

Did you talk to your lawyer?

NO! Need to find another one.

Have you talked to the client? What do they want? (talking to them may or may not be the right thing, ask your lawyer)

From the way the Complaint was written, it sounds like the lawyer is trying to get something from anybody.

One thing that suprised me is how poorly the Complaint was written by the lawyer. Misspellings, making statements that are clearly incorrect and grammatical errors.

In this case, since the buyers ran into other problems that had nothing to do with the home inspection, the lawyer just included the home inspection with all the others.

I know some people in the past wrote that if you do not have E&O insurance, it is less likely the lawyers will pursue the lawsuit. Whether I have insurance or not makes me think the same process would take place.

My question is, if I didn't report this to my insurance, would it still go to the arbitration as noted in the contract signed.

I still don't see how Home Inspectors can get by without E&O insurance.

I would file a complaint against their atty. for naming you in this suit when an agreement and report exists that clearly shows no fault on your part.
If more people would file complaints against attys, this 5th grade mentality might be reduced somewhat.


I would also remind the client that you are counting every minute of your time and will proceed to collect from them if they do not prevail against you.

I assume you have an agreement that allows for the above action but it may not even be needed to take legal action.

I would also remind the client that you are counting every minute of your time and will proceed to collect from them if they do not prevail against you.

I assume you have an agreement that allows for the above action but it may not even be needed to take legal action.

I have that written in the contract the buyers signed.

I think what amused me the most is the lawyer keeps referring the Realtor as an employee to the reality company she belongs to. Plus they are suing the realty company.

Even a blind squirrel finds a nut every now and then, protect yourself!

Originally Posted by Kevin Luce

In this complaint, they are suing me, the sellers, the buyer's Realtor, the realty company and the home warranty company.

Originally Posted by Kevin Luce

I think what amused me the most is the lawyer keeps referring the Realtor as an employee to the reality company she belongs to. Plus they are suing the realty company.

Originally Posted by Joseph P. Hagarty

Agreed. Active Claims should not be discussed in Open Forums.

Kevin,
He is going after the assets. If they are tied up in the Realtor's company it's on the list.

I can understand your frustration, Joesph and others have given all of us good sound
advice.

Let this thread go,come back after you have a Dismissal or Signed Settlement.

Kevin,
I feel for you. I do agree with most of the other posts, especially the ones that suggest you suspend talking about this paticular case.

I don't know about your insurance company, but mine REQUIRES me to notify them as soon as I am aware of a potential or pending lawsuit. Failure to do so may qualify them to cancel your coverage.

I don't agree with Bruce about filing a claim against the atty. To me, that is just a waste of time, money ($$$$), and stomach pain to get - well, nothing in return.

While you may have done 99 things out of a hundred correctly, there is likely at least one thing that you didn't do (any/all of us will miss "something"), and THAT'S why they are taking you to court. Just that fact that you did the inspection at the property gives them cause to include you.

I know this too well, I was sued by a woman that bought a house two years after I did an inspection - and the inspection was for someone else. Yes it got thrown out, yes it cost me a bunch of $$$$, and no, I wasn't able to do anything to go after her or her atty.

Wish you well with it

JF

If you do not have E&O insurance, how would you respond to this? For the % of people that talk about not having E&O insurance, somebody must have some experience in dealing with this type of situation.

I do agree with the comments about keeping quiet when it comes to the case itself.

You can always counter sue them for a frivilous lawsuit and name them and their lawyer in the suit.

First thing is that is going to cost them money out of their pocket immediately and they may just drop the whole thing.

rick

Originally Posted by Kevin Luce

If you do not have E&O insurance, how would you respond to this? For the % of people that talk about not having E&O insurance, somebody must have some experience in dealing with this type of situation.

I do agree with the comments about keeping quiet when it comes to the case itself.

If you don't have E&O you will have to pay for everything on your own. You will have to pay the attorney, experts, etc.

If you are in a state that requires E&O then it is a moot point.

As for a signed contract and the part about arbitration, this does not always work. Some states do not allow you to remove a persons right to a trial by a judge and jury. FYI, after going through an arbitration many years back, I do not recommend it to anyone.

A question: Are the papers you received just a demand or is it a court document with a case number, etc.

A question: Are the papers you received just a demand or is it a court document with a case number, etc.

It's a court document with a case number.

Originally Posted by Kevin Luce

It's a court document with a case number.

Bummer! Call you insurance company in the morning!

Originally Posted by Scott Patterson

Bummer! Call you insurance company in the morning!

Yep, Bummer.

Originally Posted by Scott Patterson

If you don't have E&O you will have to pay for everything on your own. You will have to pay the attorney, experts, etc.

I had PrePaid Legal, they would have to be willing to pony up enough money to effectively match my 'pre-authorized' attorney time - 400 hours.

Let's see ... 400 hours times $400 per hour equals $160,000 - just to come to the table to play. Not many people are willing to place a bet that high, much less just to 'ante up'. (I used to say $400 times $200 per hour, but times have changed and attorneys charge more now.)

I never had E&O and only once had to contact my PrePaid Legal provider for a letter to a seller, they refused to 'ante up' the $80,000 it would have taken to overcome my attorney's letter stating that they are been pre-authorized for 400 hours to start with ... "to start with" ... I never heard from them again.

Jerry P.

I had PrePaid Legal, they would have to be willing to pony up enough money to effectively match my 'pre-authorized' attorney time - 400 hours.

Prepaid Legal service I understand, but pony up enough money to effectively match my 'pre-authorized' attorney time is where I get lost. Can you elaborate.

Kevin -

Send me your email and I'll send you 3-4 responses that I've sent to complaint letters from past customers (FBI Agent, District Court Judge, City Prosecuting Attorney).

Our company rule is this: If its our fault - pay. If its not our fault, not our problem, hidden, not part of what we do - be nice one time and if they keep coming get rude - very fast and very hard.

That may not sit well with you, but in 28 years its been the rule we live by.

Sample Closing Statement To Whiner:


My bottom line with you and your agent is this – I take my business real seriously. You have written comments that I consider slanderous and libelous to me, the real estate brokerage and where else I can only guess. I would strongly suggest that you show our inspection report, the complaint letter you have written about our service, and the inspection services agreement telling what we do and don’t do during an inspection (which you read and signed prior to our doing the inspection) to your attorney for his review / advice.

If I see or hear about any more of this desultory and slanderous type of activity on your part, I will immediately bring suit against you, your real estate agent, their brokerage, and your attorney). If you, your attorney, your agent, etc feel we’re overlooked a major issue that we were required to inspect (and in your case it was clearly explained in photos, verbally to you at the site, and in the report that we could not examine the A/C unit because it was 31 degrees outside and could damage the unit, etc) we cordially invite you to file arbitration against our company per the terms of our original inspection agreement which was read & signed by you prior to the inspection.
“Have A Nice Day”

Dan Bowers

I agree with all as well. After nearly ten years of having no law suits I had a complaint filed recently that made me sick. It was so frivolous that I was sure my insurance attorney would file something to have it thrown out. After my letter to the plaintiff's attorney they offered to settle for his fees. It was one of those shotgun suits and had, I think 50 defendants. It is legal extortion!
I suggest we start legal defense fund for frivolous suits against good inspectors, find a few law offices willing to help and go after some of these attorneys that prey on inspectors and their insurance companies.
I recently started offering Pre-Paid Legal to my clients and trainees. For $25 bucks a month you can have practically unlimited access to an attorney. It has stopped a few of these groundless actions against my company in the past. If any of you are interested in hearing more about Pre-Paid Legal let me know. I am all for going after these guys! Don't give up. Your law suit will be handled by your insurance carrier if you follow their instructions.
Good luck, Tim

Originally Posted by Kevin Luce

Prepaid Legal service I understand, but pony up enough money to effectively match my 'pre-authorized' attorney time is where I get lost. Can you elaborate.

With PrePaid Legal you get a certain amount of 'free defense time', depending on how long you've been with them. After a number of years, at least back then, the 'free defense time' went to 400 hours and was capped there.

Let's say you have 100 hours 'free defense time' and someone files a lawsuit against you. You contact your PrePaid Legal provider and have them draft a letter to the Plaintiff's Attorney stating the reason you should be discharged from the lawsuit (such as everything was in your report and it is the Plaintiffs responsibility to actually *read* their report, blah, blah, blah) and then have your attorney from PrePaid Legal include a statement that they have been pre-authorized to spend 100 hours in your defense to start. That's you 100 hours free defense time.

Now, the opposing attorney needs to think about what is to be gained for him and his client when his client much pony up and match (ante up into the game) the 100 hours you have pre-authorized your defense team. The opposing attorney will likely tell their client something to the effect of 'We can continue this, however, at $250 per hour, you are looking at $25,000 just for me to try top the pre-authorized time your inspectors attorney had been authorized, plus there will be additional expense on my part, so you are probably looking at spending at least $35,000 just to try to overpower the inspectors position, and there is no guaranty of you you prevailing, and, even if you do prevail, there is no guaranty that you will be able to recover attorneys fees, plus, you are only only suing over $20,000 and the other parties are more culpable than the inspector, being as all of these items are in his report to start with.

Their best decision is to release you from the lawsuit. It's all about making the hurdles as high as possible to dissuade the opposing party from trying to jump them all ... they may jump one or two of your hurdles, but you want to make sure they have no desire or means to jump them all.

This may not sit well with many people, but have you given any thought to the possibility that the very reason that you were included in this suit is because you DO have E&O insurance?

Ultimately, they will be left to their proofs in court. If you force that issue, you will find a quick retreat on their part, if your documentation is in order, as you suggest, because they have none.

Don't get rattled by lawyers. Most of them don't have a clue. The rest are so arrogant that they are easily stumbled. You just have to take the time to learn how to deal with them.

Good luck. And do not let your insurance company dictate your handling of this case. They probably aren't looking out for you. They are looking out for their stock holders and board of directors.

Randy and Jerry, do you have contact info for the pre paid legal you mentioned?
I have pre-paid legal but it is only for personal, not business and I have not had any luck when I searched this out in the past.
Thanks, Jim

Originally Posted by Jim Luttrall

I have pre-paid legal but it is only for personal,

Are you incorporated?

That's all you need.

Your corporation should have zero or very few assets, and to bother trying to break through the corporate shield to get to you just so they can spend another $100k for their ante up to play typically does not make sense.

I got my PrePaid Legal back when it covered both personal and small business, since then they have started a plan which covers small business (available in some states, but not all), but, if you are incorporated and your corporation has very few assets - why bother with it?

Just my thoughts and opinions on it.

In many states having the incorporations doesn't provide the protection many believe. The provider of the service (the person who performed the actual inspection) you can be be personally sued as you are responsible for the service. An attorney who has done this before will most likely name the LLC and the individual who performed the inspection in the suit. While it is true that they will get the assets of the company prior to assessing the individual as Jerry said, the "piercing" of the corportate viel may or may not be easy...depending on the history, capability, and performance of those who set it up and maintained it. If none of the assets of the company can be touched, or if nothing is there to touch, then the individual can be assessed the awarded amount.
Beware that your insurance company can and most likely will settle regardless of your culpability in the issue. Simply put, our rates stay lower when they settle because it costs less to settle,,,,for your deductible,,,,,than to fight the case. Of course some cases are worth fighting in order to set a presedence in the case to try and defer other suits but yours doesnt' seem like one of those. Stay in close contact with your insurance provider,,,know EVERYTHING they are discussing or considering.
The only answer that really means anything is the one provided by YOUR attorney. Unless you keep up on all matters of litigation locally, state, and nationally, your defensless against even the most stupid attorney that comes after you for inevitably they still know more than YOU.

Originally Posted by Kevin Luce

If you do not have E&O insurance, how would you respond to this? For the % of people that talk about not having E&O insurance, somebody must have some experience in dealing with this type of situation.

I do agree with the comments about keeping quiet when it comes to the case itself.

That's easy. I got a lawyer letter once. I simplly replied back that I do not carry E&O insurance. He said in that case please refund the inspection fee, which I did.

If I HAD E&O insurance he would have pursued it, of that I am positive.

The funny thing is it was over a basement flooding. The storm sewer in the street backed up through a floor drain in their basement. How in the world could I have foreseen that?

Lawyers - kill 'em all and let God sort them out as the saying goes.

What do you call an attorney on the bottom of the ocean?







A good start!

Originally Posted by Randy Aldering

This may not sit well with many people, but have you given any thought to the possibility that the very reason that you were included in this suit is because you DO have E&O insurance?

Good luck. And do not let your insurance company dictate your handling of this case. They probably aren't looking out for you. They are looking out for their stock holders and board of directors.

He may or may not have gotten sued if he didn't have E&O, BUT one thing is for sure, the lawsuit would either go away or settle for next to nothing if he didn't have it.

Lawyers will not sue where there are no deep pockets. Put all your assets in trusts, have a corporation and you not only don't have deep pockets, you don't even have any pockets. You don't sue someone who owns nothing and has no assets.

And no the insurance company will NOT look out for you, they are there to protect their interests, not yours.

Yes - this is David Brauner from OREP. Definitely report it to insurance company, as if you don’t, coverage may be denied later. Each case is different but most companies that specialize in inspector coverage can separate the wheat from the chaff complaints and will repsond as such if it is frivolous.

Originally Posted by Bruce Lunsford

Put all your assets in trusts, have a corporation and you not only don't have deep pockets, you don't even have any pockets.

I've been told that you want the corporation to own nothing, not even trusts or other entities as, once the corporate veil is pierced, they can take control of the corporation, which includes everything owned by, controlled by, or associated with, the corporation.

If they come after you personally (and they can), if your defense is not good enough, and your trusts are not isolated from you enough, you will also lose control of the trusts.

The best defense is a good defense, one which makes them not want to bother with it (for a variety of reasons, one being that it just plain costs too much to ante up to the table to play the game).

Originally Posted by David Brauner

Yes - this is David Brauner from OREP. Definitely report it to insurance company, as if you don’t, coverage may be denied later.

Folks,

If anybody should know he should.

Thanks Dave

Update

I feel these people are wanting everything including the moon which I know they will not get. While I don't what to say to much at this time, we are going to talk to our lawyer to get his opinion and go from there. Again, I don't want to say what has happened up to this point since this is open to the public.

Insurance companies have their place but so does our lawyer.

Don't try and out smart them!!!!

Get E&O insurance period. Have enough to cover as recommended by your E&O

Many past litigation experet witness work has given me this info.

Rolland Pruner