Thread: Missoula, MT -- $300,000 Jury Verdict Against Home Inspection Service

Hi Everyone,

We obtained a $300,000 verdict last week against Complete Home Inspections and its owner/operator in Missoula County District Court. We will be blogging on the details underlying the case in the coming weeks (now that a verdict has been obtained) but here's the discussion currently available on our site.

Thanks, and remember: If you see a defect, report it. If you can't see it or get to it and you're supposed to inspect it, just say so. And don't try to defend yourself using a "Scope of Inspection" provision that claims your inspection is far more limited than your professional standards or state inspection laws actually require.

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Tantalizing, but where is the beef??

Originally Posted by Garry Sorrells

Tantalizing, but where is the beef??

Originally Posted by CJ Johnson

We will be blogging on the details underlying the case in the coming weeks (now that a verdict has been obtained) ...

Just where he said it was ... still hanging in the refrigerated box.

What is also interesting is that he had a corporation and was deemed personally liable - probably mixing personal and business stuff up too much? Many people use a corporation for protection then use the business as a personal bank account or their personal bank account for the business or mix the two together - the protection of the corporate veil just went POOF! when they do that.

From his March 10, 2015 Blogggggg.

"Generally, corporate officers and agents are shielded from personal liability .......... The general rule, however, does not apply "where the officer personally committed a tort." Id "

Basically you are responsible for what your do... Some of that New Age Thinking????

4 day trial and weeks to draw out the tid bits. Guess that is why it has to be keep refrigerated.

Originally Posted by Garry Sorrells

From his March 10, 2015 Blogggggg.

"Generally, corporate officers and agents are shielded from personal liability .......... The general rule, however, does not apply "where the officer personally committed a tort." Id "

Basically you are responsible for what your do... Some of that New Age Thinking????

4 day trial and weeks to draw out the tid bits. Guess that is why it has to be keep refrigerated.

Personal liability can exist under Montana law if the owner/agent was personally negligent or acted contrary to the best interests of the corporation. These are two separate lines of authority and the case was submitted under "best interests." The jury determined that the inspection was so inadequate that it was not in the interests of the business to have conducted it in that way. More to follow.

http://www.bigskytrial.com/practice/...e-malpractice/

Was the inspector insured for E&O?

Originally Posted by Raymond Wand

http://www.bigskytrial.com/practice/...e-malpractice/

Was the inspector insured for E&O?

That would add a little twist as how it may have been defended.

- - - Updated - - -

http://www.bigskytrial.com/practice/...e-malpractice/

“ B. Home Inspector Malpractice
The Home Inspection Trade Practices Act loosely defines “home inspector” as anyone conducting a home inspection for compensation. M.C.A. § 30-14-1002(3).

(1) ‘Home inspection’ means a physical examination of a residential dwelling to identify major defects in various attributes of or attachments to the dwelling, including mechanical, electrical, and plumbing systems in addition to structural and other essential components. Home inspections are performed for compensation and employ visual observation and the testing of user controls but not mathematical or specialized engineering sciences.
(2) ‘Home inspection report’ is a written document prepared by a home inspector for a client and issued to the client in exchange for compensation after a home inspection has been completed. The report must clearly identify and describe:
(a) the inspected systems, structures, and other relevant components of the dwelling;
(b) any major visible defects in the inspected systems, structures, and other relevant components of the dwelling; and
(c) any recommendations for further evaluation of the property by other appropriate persons. “

“Montana Consumer Protection Act. M.C.A. § 30-14-1005. Increased (up to three times, or “treble”) damages and attorneys fees are therefore available, in the discretion of the district court, for violations of the Home Inspection Trade Practices Act. “
------

Must say that Montana approach is interesting. No copying of an associations SOP, but a broad consumer friendly version with the ability of a broad interpretation of requirements. Then the ability to connect to Consumer Protection Act to ramp up the possible awards. Written by lawyers for lawyers, not saying it is bad just a observation and interpretation of the law.

Well I suspect as per my link that lawyers write the contracts or approve the wording, conditions, exculpatory clauses for their client(s).

Yet here we are being told

B. Home Inspector Malpractice

Read a home inspection agreement and you’ll discover that home inspectors take more than they purport to give. The agreements: (1) claim that home inspectors do next to nothing; and (2) take responsibility for absolutely nothing. Great work. If you can get it.

Guessing that lawyers are fleecing the client if there is consumer protection laws that run contrary to what lawyers are telling their clients (home inspectors) to put in their contracts.

Which leads me to ponder why lawyers are not falling under consumer protection laws if they are writing contracts for their clients which run contrary to public policy laws. Hmmm.... Who is misleading whom?

Originally Posted by Garry Sorrells

That would add a little twist as how it may have been defended.

- - - Updated - - -

http://www.bigskytrial.com/practice/...e-malpractice/

“ B. Home Inspector Malpractice
The Home Inspection Trade Practices Act loosely defines “home inspector” as anyone conducting a home inspection for compensation. M.C.A. § 30-14-1002(3).

(1) ‘Home inspection’ means a physical examination of a residential dwelling to identify major defects in various attributes of or attachments to the dwelling, including mechanical, electrical, and plumbing systems in addition to structural and other essential components. Home inspections are performed for compensation and employ visual observation and the testing of user controls but not mathematical or specialized engineering sciences.
(2) ‘Home inspection report’ is a written document prepared by a home inspector for a client and issued to the client in exchange for compensation after a home inspection has been completed. The report must clearly identify and describe:
(a) the inspected systems, structures, and other relevant components of the dwelling;
(b) any major visible defects in the inspected systems, structures, and other relevant components of the dwelling; and
(c) any recommendations for further evaluation of the property by other appropriate persons. “

“Montana Consumer Protection Act. M.C.A. § 30-14-1005. Increased (up to three times, or “treble”) damages and attorneys fees are therefore available, in the discretion of the district court, for violations of the Home Inspection Trade Practices Act. “
------

Must say that Montana approach is interesting. No copying of an associations SOP, but a broad consumer friendly version with the ability of a broad interpretation of requirements. Then the ability to connect to Consumer Protection Act to ramp up the possible awards. Written by lawyers for lawyers, not saying it is bad just a observation and interpretation of the law.

The Defendants' expert (the president of the Montana Real Estate Inspector's Association) was heavily involved in the passage of the Home Inspection Trade Practices Act and testified at length to the importance of making violation of the HITPA a per se (automatic) violation of the Montana Consumer Protection Act (formatting will probably be weird/off):

Question: You said you put together -- you were somehow involved in putting together the Home Inspection Trade Practices Act?
Answer: Back in the beginning, yes.
Question: All right. One of the reasons why you made the Home Inspection Trade Practices Act -- Let me ask you this: Do you realize that the Home Inspection Trade Practices Act, if you violate it as an inspector, it's a per se automatic violation of the Montana Consumer Protection Act?
Answer: Yes.
Question: Okay. And the reason why that
legislation was drafted that way is because home inspection is a very important consumer issue, right?
Answer: Yes.
Question: And you want to make sure the consumers, the people getting these home inspections, are getting protected.
Answer: Yes.
Question: And you also understand that the Consumer Protection Act contains provisions for attorney fees and increased for up to three times for what are called treble damages.
Answer: Yes.
Question: And that was deliberate?
Answer: Yes.
Question: That was something the home inspectors --
Answer: I understand.
Question: Wanted?
Answer: Yes.
Question: And you want that there because that's the hammer, because there is no other enforcement mechanism under Montana law, is there?
Answer: To my recollection, that's correct, yes.
Question: And so that actually was the thought process that the home inspection profession had when they supported the Home Inspection Trade Practices Act.
Answer: You bet. Yes, yes. We had hoped that this would be the initial step of four steps, and we're disappointed that this hasn't been expanded in the meantime.

(Depo. 207:18 – 209:11).

“Montana Consumer Protection Act. M.C.A. § 30-14-1005. Increased (up to three times, or “treble”) damages and attorneys fees are therefore available, in the discretion of the district court, for violations of the Home Inspection Trade Practices Act. “
------
What was the intent of that clause? Seems to be short sighted. As a lawyer did the court award you three times your fee?

Originally Posted by CJ Johnson

The Defendants' expert (the president of the Montana Real Estate Inspector's Association) was heavily involved in the passage of the Home Inspection Trade Practices Act and testified at length to the importance of making violation of the HITPA a per se (automatic) violation of the Montana Consumer Protection Act ...

I would not use, as an expert for the defense, someone is on record for promoting that - what was the defense thinking?

The defense was, should have been, trying to define it to the minimum or inconsequential ... not that if not found 'not guilty' there would be an automatic treble amount based on the defendant's own expert's testimony that treble damages was intented as "the hammer" 'to teach the home inspector a lesson'.

WHAM! That hammer came down hard.

Some people forget the saying 'be careful what you ask/wish for ... you just might get it' ... and you don't have to wait until ... .

https://casetext.com/case/russell-v-bray?page=6

In determining whether an exculpatory clause affects the public interest, courts are to use six criteria as outlined by our Supreme Court as follows:

[a.] It concerns a business of a type generally thought suitable for public regulation.

[b.] The party seeking exculpation is engaged in performing a service of great importance to the public, which is often a matter of practical necessity for some members of the public.

[c.] The party holds himself out as willing to perform this service for any member of the public who seeks it, or at least for any member coming within certain established standards.

[d.] As a result of the essential nature of the service, in the economic setting of the transaction, the party invoking exculpation possesses a decisive advantage of bargaining strength against any member of the public who seeks his services.

[e.] In exercising a superior bargaining power the party confronts the public with a standardized adhesion contract of exculpation, and makes no provision whereby a purchaser may pay additional reasonable fees and obtain protection against negligence.

[f.] Finally, as a result of the transaction, the person or property of the purchaser is placed under the control of the seller, subject to the risk of carelessness by the seller or his agents.

Originally Posted by CJ Johnson

The Defendants' expert (the president of the Montana Real Estate Inspector's Association) was heavily involved in the passage of the Home Inspection Trade Practices Act and testified at length to the importance of making violation of the HITPA a per se (automatic) violation of the Montana Consumer Protection Act (formatting will probably be weird/off):

(Depo. 207:18 – 209:11).

I met Bruce and Judy Kirby back around 2007 or so when I and another member of EBPHI were invited to speak at a congressional hearing at the Capital when H.I. licensing was being considered. Impressed is not the word I would use in describing his testimony!

Again it is interesting that the Defendants' expert (the president of the Montana Real Estate Inspector's Association) wasn't all about covering the HI, refreshing. It is possible that the expert may have had an ax to grind. The law seems to puts the onus of performance squarely on the HI. Where performance criteria may be quite subjective.

I have to agree with JP that having this person testifying did not serve their cause. Or at least I could not see any benefit. Nails in the coffin.

Originally Posted by Garry Sorrells

Nails in the coffin.

Three times as many nails ... by his own request!

The defence likely thought they could play it to their advantage, but got outsmarted. Happens all the time.

Originally Posted by Raymond Wand

The defence likely thought they could play it to their advantage, but got outsmarted. Happens all the time.

The post was part of a deposition not in court testimony and depending how it was handled the person may be more at ease, though I can not imagine why, except that it is not in a court room.

As far as triple damages, that may not effect the compensation for the attorney. Would have to believe that if the winning attorney collects on time and cost they also collect 100% on percentage of verdict. Since the judge determines how much the attorneys are awarded.

Do you think that there won't be an appeal? Possibility, depend who is paying the verdict.

I was under the assumption the Montana H.I. Assoc. was asked those series of questions on the stand and not at examination for discovery?

Originally Posted by CJ Johnson

The Defendants' expert (the president of the Montana Real Estate Inspector's Association) was heavily involved in the passage of the Home Inspection Trade Practices Act and ..........................


(Depo. 207:18 – 209:11).

I was taking "(Depo. 207:18 – 209:11)" as signifying Deposition.

Side Bar:
Definition and a good explanation of "Deposition" : http://legal-dictionary.thefreedicti...com/Deposition

Thanks!

One sentence tells the story about what the home inspection profession's main problem is:

"The reality is that home inspectors provide an invaluable service to potential homebuyers – but only when they know what they’re doing and how to communicate their findings."

Originally Posted by John Ghent

One sentence tells the story about what the home inspection profession's main problem is:

"The reality is that home inspectors provide an invaluable service to potential homebuyers – but only when they know what they’re doing and how to communicate their findings."

John,

That can even be shortened down to the last part: "how to communicate their findings".

Good or bad, if the home inspector cannot communicate their findings to their client, neither the home inspector, nor the home inspection, are of any value ... and the report is how the home inspector communicates their findings to their client.

I have heard (and read - even here) where home inspectors would indicate that they would write one thing and then tell their client something different ... usually the phrase 'so as not to cause alarm' is in what they say or write.

And, yes, the "when they know what they're doing" is also important, but if some home inspector does not know what they are doing and effectively communicates that to their client ... and their client continues on with that home inspector ... the client has some responsibility.

Originally Posted by Jerry Peck

John,

That can even be shortened down to the last part: "how to communicate their findings".

Good or bad, if the home inspector cannot communicate their findings to their client, neither the home inspector, nor the home inspection, are of any value ... and the report is how the home inspector communicates their findings to their client.

I fully agree.

anyone know how to get a lawyer out of a tree

cvf

Charlie, be nice.

CJ Johnson is the only lawyer that I know of that has dared to dialogue in this forum. Granted his thread is a little self serving, but I do not hold that against him since he will discuss the topics. I am sure that someone would eventually find the information and post it. But is much better to have it from the proverbial horses mouth. I appreciate his postings...

Originally Posted by CHARLIE VAN FLEET

anyone know how to get a lawyer out of a tree

Chain saw?

(and the tree is not damaged in any way )

Originally Posted by Garry Sorrells

Charlie, be nice.

CJ Johnson is the only lawyer that I know of that has dared to dialogue in this forum. Granted his thread is a little self serving, but I do not hold that against him since he will discuss the topics. I am sure that someone would eventually find the information and post it. But is much better to have it from the proverbial horses mouth. I appreciate his postings...

I agree with Garry.

One of our daughters is a lawyer, so I can say this -

Q. What do you call 50 lawyers at the bottom of the ocean?

.
.
.

A. A good start.

and

You are driving on a road and you see something laying in the road far ahead of you ... how do you determine if it is a dead skunk or a dead lawyer?

.
.
.
When you see skid marks leading to it - you know it is a dead skunk.

Originally Posted by Jerry Peck

Chain saw?

(and the tree is not damaged in any way )



I agree with Garry.

One of our daughters is a lawyer, so I can say this -

Q. What do you call 50 lawyers at the bottom of the ocean?

.
.
.

A. A good start.

and

You are driving on a road and you see something laying in the road far ahead of you ... how do you determine if it is a dead skunk or a dead lawyer?

.
.
.
When you see skid marks leading to it - you know it is a dead skunk.

What's the difference between a lawyer and God? God doesn't think he's a lawyer.

Originally Posted by Garry Sorrells

Charlie, be nice.

CJ Johnson is the only lawyer that I know of that has dared to dialogue in this forum. Granted his thread is a little self serving, but I do not hold that against him since he will discuss the topics. I am sure that someone would eventually find the information and post it. But is much better to have it from the proverbial horses mouth. I appreciate his postings...

Absolutely, it's a self-aggrandizing thread. But I too really appreciate that I can come on to this forum and have a solid discussion with you all about your profession and mine and how they intersect (or collide) with one another from time to time. Consumer-side real estate E&O is something I take very seriously and is a passion of mine even if it's sort of a bizarre thing to be passionate about. I represented REALTORS(R) for 12 years on malpractice claims and just couldn't do it anymore. Nothing against all REALTORS(R), certainly nothing against all home inspectors. You provide an invaluable services to consumers who'd otherwise be in the dark on property condition, and I like to think I provide an invaluable service to consumers who are mistreated or had the screws put to them in real estate transactions. Fortunately for the consuming public, there are far more good home inspectors than bad ones. The same can't be said for real estate agents and brokers.

Happy trails have a great week everyone.