Home Warranty Comments - InspectionNews

Brad Deal · #1 (**permalink**) 10-10-2009, 12:45 AM

I have been inspecting for over 10 years and have been sued only one time. My client stated that I, along with every person who stepped foot in the home, had missed a leak in the dishwasher that resulted in a $60,000 mold infestation. The home was occupied during my inspection and the dishwasher was being operated by the owner. There were no visible leaks to be reported. The home closed escrow and was vacant for 2 months prior to my client's occupancy. The day after he moved in he called me to report a leaking dishwasher. I went out to review the problem that afternoon and documented a few drops of water visible at the base of the unit.

In my report I stated the unit was in operation during my inspection, and that there was signs of staining or leaking. I explained to the client how dishwashers can dry out over time and leak if not operated. I recommended in writing that the leak be repaired asap by a qualified plumber.

6 months later I recieve a demand letter for $60,000.00. Stating the entire area was water damaged and mold infected.

This guy sued everybody pro per without hiring an attorney. His suit was based on an invoice from the home warranty company stating the leak under the dishwasher was pre-existing and should have been caught by the home inspector or pest inspector.

The client did not participate in my inspection walkthrough. Nor did he perform the 5 day walk through prior to close of escrow.

I ultimately prevailed when the judge threw the case out of court but only after the pest company settled, listing agent settled, buyer's agent settled, and I never discovered what happened to the seller.

I had before and after pictures of the affected areas! I refused to be backmailed and fought to the end regardless of the costs.

The real question I am asking is this, "What is the liability for trades persons who have virtually no understanding of the standards of practice or standard of care for the home inspection industry when they state that the home inspector should have caught some issue or condition?"

This seems to be a trigger that repeats over and over in these discussions that prompts a client to sue. The carpenter said we should have been able to see through the new paint. The plumber who says we can see through walls. The electrician saying we should discover voltage drops, etc.

Is there any recourse against these trade people?

Brad Deal
20/20 Home Inspections
Home Inspections

Rick Cantrell · #2 (**permalink**) 10-10-2009, 06:01 AM

"This guy sued everybody..."
Common practice to sue everyone.

""What is the liability for trades persons who have virtually no understanding of the standards of practice or standard of care for the home inspection industry when they state that the home inspector should have caught some issue or condition?" "

Other than libel or slander, none. They are free to express thier opinion.

"Is there any recourse against these trade people?"

Yes, you can sue, you won't win, but you can sue.

Scott Patterson · #3 (**permalink**) 10-10-2009, 08:00 AM

If you are in a State that has a home inspection license law then you do have a few additional legs to stand on with frivolous lawsuits. Unregulated States are like the Wild West, everything goes and the courts decide.

Keep in mind that with our legal system anyone can sue anyone for anything. The defendant must provide the proof that they are not guilty, the plaintiff needs to only accuse.

Your defense starts when you first meet the client or set the appointment. You need to discover their expectations and let them know what you can and can't do; like not being able to see through walls! Then writing a good report that leaves little to the imagination is your next line of defense. Your final line of defense is to have E&O coverage to defend you and so it does not come out of your own pocket.

It is impossible to stop others from saying that someone else should have caught or discovered a problem. Warranty companies are not going to do anything if a condition was preexisting, they will deflect the blame on to others.

Daniel Leung · #4 (**permalink**) 10-10-2009, 08:15 AM

Hi Brad, I understand it is not easy to handle this situation. May I ask you a question; do you have Errors and Omissions Insurance?
If you have E & O, please report to the insurance company immediately, and then they will assign a lawyer with a budget for you to defend and fight back. Once the budget is over, the lawyers (from both sides) will settle the case out of court. To reduce the harms, please try to finish the budget ASAP.
If no E & O, please obtain legal advice using your own money. Do not forget to write down everything from your memory NOW, and keep your conversation, invoice, contract, worksheet, report and photos in record.

Raymond Wand · #5 (**permalink**) 10-10-2009, 03:09 PM

This case has nothing to do with performing a bad inspection, bad reporting, nor setting the expectations of the client, it has to do with a client who perceived and acted on his perception that he had a right to seek damages from a negligent inspection.

Fortunately the trier of fact saw that the plaintiff had not suffered a loss as a result of an inspection conducted to industry standards, nor that the plaintiff could establish that the inspection came up short of a standard of care as per the SOPs.

And fortunately the lack of E&O was probably a good thing.

As to home warranties don't even waste your time or monies selling them, they have more disclaimers than Wrigley's got gum.

Congratulations on your stamina and win!

Roy Cooke sr · #6 (**permalink**) 10-10-2009, 06:14 PM

Daniel LeungHi Brad, I understand it is not easy to handle this situation. May I ask you a question; do you have Errors and Omissions Insurance?
If you have E & O, please report to the insurance company immediately, and then they will assign a lawyer with a budget for you to defend and fight back. Once the budget is over, the lawyers (from both sides) will settle the case out of court. To reduce the harms, please try to finish the budget ASAP.
Daniel LeungHi Brad, I understand it is not easy to handle this situation. May I ask you a question; do you have Errors and Omissions Insurance?
If you have E & O, please report to the insurance company immediately, and then they will assign a lawyer with a budget for you to defend and fight back. Once the budget is over, the lawyers (from both sides) will settle the case out of court. To reduce the harms, please try to finish the budget ASAP.

Sorry I disagree with Daniel .
Having seen how Insurance companies will settle and not fight is wrong and only encourges more frivilious claims .
They will settle and it frequently is less then your deductable.
They then raise The HIs insurance cost as he has had a paid out claim.
The Insurance wins big time with you now paying a higher premium.
I feel you did what more need to do when a bad claim is made .
Thanks for doing this and thanks for reporting it so others can learn
Roy Cooke Royshomeinspection.com

Ted Menelly · #7 (**permalink**) 10-10-2009, 08:01 PM

I agree completely with what you did. I have not been sued in 37 years of working on my own but have had loud mouth threaten me in the past. I just put a louder mouth forward to let them know I am not screwing around and say "Lets go. Take me to court. You will lose, I will win and you will leave with your tail between your legs."

They yell I scream louder. I will always start out real nice and cuddly and all but the first time a threat comes or a voice goes up I take the damned loudest and most evil voice I can muster and don't let up. They seriously think about the stupid crap they are about to try and pull. They know they are wrong and if you do not nip it in the butt seriously fast and hard they think they have you as they wish. They will not want to deal with me. Some may say that is not the professional way to deal with it but let me tell you. Someone threatens me and wishes to try to take something from me that I worked for then they deserve anything that I can throw at them. Their life will be a miserable freaking hell that they will not wish to live thru.

Sounds a bit harsh to some of you. Well, maybe I will be so bold as to ask you to rethink your ways. Someone tries to screw you over....sorry...they just crossed the wrong line. Treat them as the lizards they are. No one wants to live thru hell for the next year of their life. Show them that it is what things are about to come, a living hell. They will back off. This p footing around and being the gentleman professional and handling it in court and being so sicky sweet. Sorry.....you will more than likely lose more than your money in that one.

You have so many coming out of school nowadays thinking this is the new age where everyone handles everything thru lawyers and court like civil respectable...loosers. Make their life a living hell. Then you have the uneducated looking in from the sidelines thinking they can get an easy take from someone. It is just as easy to make their life a living hell.

I know one that will say out loud that this is some kind of fantacy...... Think again. Life is what you make it. You want to live thru hell then handle things like the polite cuddly pro. You want to keep from living thru hell? Let them know with out a possible trace of bluff that they with be living in hell and you won't.

There is no nice guy when someone is trying to screw you over.

william siegel · #8 (**permalink**) 10-11-2009, 09:25 PM

The problem with today's society is no one want to take responsibility for their own actions. Everything is always someone else's fault. I sure hop this idiot had to pay your lawyer fees and compensated you for time missed from work.

Rick Hurst · #9 (**permalink**) 10-11-2009, 10:18 PM

Brad,

Did you remove the kickplate on the bottom of the dishwasher at the time of your inspection?

If you did not, did you disclose to the client that you did not inspect below the dishwasher or remove the kickplate?

I believe not only is it important to document what we see but also to document what you don't see. If that includes a disclaimer on the report, so be it. At least the client will then know what you did inspect for and what you didn't.

rick

James Skinner · #10 (**permalink**) 10-13-2009, 04:22 AM

Quote:

Originally Posted by Rick Hurst

I believe not only is it important to document what we see but also to document what you don't see. If that includes a disclaimer on the report, so be it. At least the client will then know what you did inspect for and what you didn't.

Rick: Good advice, but do you really think it would have mattered to this client? All of the documentation of method ect., in my opinion, is lawyer fodder/CYA. Its similiar to reporting on the condition of a car. Engine, Ok, tested using ignition switch, no problem, didn't raise the hood. This guy just wanted his 60K+ back from wherever and whom ever he could get it. He would not have paid any attention to the additional info, cause the repairing party reinforced his feelings of being wronged.
In this case there is no way to win. If you pay, you loose both money, reputation and a client bad mouthing you to whomever will listen. If you win in court, you still have the stigma of court action, and a client bad mouthing you to whomever will listen. Not to mention, agents will look upon your service as tainted because it cost agents some if not all of their commission. I just wonder why the closing attorney wasn't named in the suit.
The tradesmen should have been sued, for slander and held liable provided the standard of practice for the inspection was upheld. Opinion is one thing but ignorance is another when it cause's harm/financial loss to another individual.
However, it is cheaper in todays legal system to pay a tribute than to set the example and defend one's position.

Lawrence Transue · #11 (**permalink**) 10-13-2009, 07:06 AM

You can sue the plaintiff to recover your costs.

I recommend the local magistrate. You probably will not win but its worth a shot. I have the following statement in my agreement that EVERY Client signs:

"In the event that any dispute arises out of the inspection, and proceedings are commenced by the client, if the client is unsuccessful in maintaining the claim in arbitration or elsewhere, then the client shall be liable to the inspector for all charges, expenses, costs and legal fees incurred by the inspector on a complete indemnity basis, including a reasonable fee for all the time spent by the inspector preparing, investigating, research, preparation for, and attendance at arbitration or court hearings and examinations."

Figure out your costs at $100.00 per hour plus legal fees and give it a shot. You may get a judge that understands small business and the costs of frivolous law suits.

Roy Cooke sr · #12 (**permalink**) 10-13-2009, 07:47 AM

I like your idea if this was to happen a few times then I expect frivolous claims would go down a lot .

Thanks ... Roy

Ron Bibler · #13 (**permalink**) 10-13-2009, 08:59 AM

Quote:

Originally Posted by Lawrence Transue

You can sue the plaintiff to recover your costs.

I recommend the local magistrate. You probably will not win but its worth a shot. I have the following statement in my agreement that EVERY Client signs:

"In the event that any dispute arises out of the inspection, and proceedings are commenced by the client, if the client is unsuccessful in maintaining the claim in arbitration or elsewhere, then the client shall be liable to the inspector for all charges, expenses, costs and legal fees incurred by the inspector on a complete indemnity basis, including a reasonable fee for all the time spent by the inspector preparing, investigating, research, preparation for, and attendance at arbitration or court hearings and examinations."

Figure out your costs at $100.00 per hour plus legal fees and give it a shot. You may get a judge that understands small business and the costs of frivolous law suits.

That statement can be used Against you if you loose a case. kind of like if it was good for you then its good for them. My attorney had me remove that out of one of my contracts.

Best

Ron

Ron Bibler · #14 (**permalink**) 10-13-2009, 09:17 AM

I did an inspection a few weeks back. the furnace was over 20 years old. the painters had just painted the place a week before the inspection. the painters had removed the thermostat. and when they put back together they did not hook up all the wires. now i did not have this information until a few days after the inspection.

I had listed many items for repair regarding to furnace and the it did not respond to the thermostat.

I informed the buyers you may want to have a new unit installed as there was a lot rust on the fan motor.

So the buyer and the agent find a new start up HAVC contractor. guy comes out looks over things put the wires in the proper place an the furnace is up and running. So now he starts bad mouthing me to the buyers and the agents saying I should have found these loose wires. and that the furnace will run for some time no need to replace it. this was the info I got back from the agents.

Sorry about the long story but the point is this HVAC Guy just had to open his big mouth and try to put me down so he could look good...

Kind of like your guy Brad.

"The real question I am asking is this, "What is the liability for trades persons who have virtually no understanding of the standards of practice or standard of care for the home inspection industry when they state that the home inspector should have caught some issue or condition?"

This seems to be a trigger that repeats over and over in these discussions that prompts a client to sue. The carpenter said we should have been able to see through the new paint. The plumber who says we can see through walls. The electrician saying we should discover voltage drops, etc.

Is there any recourse against these trade people"

Best

Ron

Lawrence Transue · #15 (**permalink**) 10-13-2009, 01:34 PM

Quote:

Originally Posted by Ron Bibler

That statement can be used Against you if you loose a case. kind of like if it was good for you then its good for them. My attorney had me remove that out of one of my contracts.

Best

Ron

Well put it back in. 99 times out of a 100 The plaintiff is already suing you for his legal fees, his pain & suffering, his terrible rash he got from the mold caused by the leaky dishwasher you missed etc...

The fact is if this guy hired an attorney, he now has to pay him for the defense. He has to use his vacation days from work. etc etc.

Its his dime now....

Dan Harris · #16 (**permalink**) 10-13-2009, 01:51 PM

Quote:

Originally Posted by Ron Bibler

Is there any recourse against these trade people"[/b]

Best

Ron

Sure there is.
Get their name and address, some day they will be selling their home

Roy Cooke sr · #17 (**permalink**) 10-13-2009, 02:16 PM

Robert Young as Marcus Welby, M.D. Played a doctor .
Raymond Burr as Perry mason Played a lawyer.
We have one in Canada Mike Holmes who plays as a home inspector .

Is there any recourse against these trade people"[/b]

Just tell people they are playing at being a home Inspector.

Roy... RHI...

Brad Deal · #18 (**permalink**) 10-13-2009, 04:44 PM

Thanks for the replies.

I deliberatly left the e/o insurance out of my description. The insurance people wanted to settle and I fired them.

My contract stated and the SOP stated the inspection panels were not to be removed. I have never taken off a dishwasher cover for a home inspection. My pictures clearly showed no leaking or staining.

What I should have done is file a cross suit against the warranty company for negilgence but I did not realize this until it was too late.

There is a significant difference between an inspector making a honest mistake and a client trying to manipulate the legal system for profit.

The warranty plumber started the whole thing by convincing the client the unit had been leaking for some time when in fact it had only occured after the seller had moved out and just as the buyer moved in, (2 month window) and the clencher was that it only leaked when running....

Again I ask, would be be possible to counter sue the warranty company for negilence and what would be the probability of prevailing?

Brad Deal

Raymond Wand · #19 (**permalink**) 10-13-2009, 04:56 PM

You would have to prove the plumber actually made those comments and you suffered a loss as a result. Good luck.

Never trust insurers to do the right thing. As in most cases it simply easier for the insurer to be an ATM machine and pay out.

Jerry Peck · #20 (**permalink**) 10-13-2009, 06:16 PM

Quote:

Originally Posted by Brad Deal

My contract stated and the SOP stated the inspection panels were not to be removed.

Do you have that Sop which states that?

Your contract wording which states that?

Thanks.

Quote:

I have never taken off a dishwasher cover for a home inspection.

How about other panels/covers?

Quote:

Again I ask, would be be possible to counter sue the warranty company for negilence

Sure. Absolutely. Go for it.

That has been answered before.

Quote:

and what would be the probability of prevailing?

Somewhere between slim and none, but I think that has been answered before too.

Jim Hintz · #21 (**permalink**) 10-17-2009, 02:00 PM

I have to agree with Lawrence - put the verbage back in your Inspection Service Agreement and then look for another attorney. When people read in an Inspection Service Agreement anything to do with Lawsuits, Attorneys, etc..., 99% of the time you will never have a problem later.

Hell, in my Service Agreement, it plainly states in bold print " Inspector cannot see through ceilings, walls, floors and insulation." This clause eliminates any and all chances of being sued for something you cannot see. Also, my Service Agreement also states in bold print - "Limit of Liability is 30 days from date of inspection." Once they sign it - game over.

Ted Menelly · #22 (**permalink**) 10-17-2009, 08:30 PM

Quote:

Originally Posted by Jim Hintz

I have to agree with Lawrence - put the verbage back in your Inspection Service Agreement and then look for another attorney. When people read in an Inspection Service Agreement anything to do with Lawsuits, Attorneys, etc..., 99% of the time you will never have a problem later.

Hell, in my Service Agreement, it plainly states in bold print " Inspector cannot see through ceilings, walls, floors and insulation." This clause eliminates any and all chances of being sued for something you cannot see. Also, my Service Agreement also states in bold print - "Limit of Liability is 30 days from date of inspection." Once they sign it - game over.

Washington State now has licensed home inspectors don't they ?

Being licensed doesn't your state put a time frame on liability of sorts. If they do you 30 day deal on your contract is about as useless as the paper written on.

Just some thoughts.

Just a little add on here. If in fact you just happen to miss a bad foundation and the costs for repairs are in the thousands do you think you 30 liability contract is going to do you any good at all.

Again....just some thoughts.

Jim Hintz · #23 (**permalink**) 10-17-2009, 10:33 PM

Quote:

Originally Posted by Ted Menelly

Washington State now has licensed home inspectors don't they ?

Being licensed doesn't your state put a time frame on liability of sorts. If they do you 30 day deal on your contract is about as useless as the paper written on.

Just some thoughts.

Just a little add on here. If in fact you just happen to miss a bad foundation and the costs for repairs are in the thousands do you think you 30 liability contract is going to do you any good at all.

Again....just some thoughts.

Ted,

After checking, you are correct about the 30 day liability clause and that will be stricken from my Service Agreement. However, the clause that states "Inspector cannot see through Ceilings, Walls, Floors or Insulation encompasses it all - unless the affected area of the foundation / basement walls are visible and my eyes just happen to get poked out just before entering the crawlspace or basement - Not very likely to happen. Thanks for pointing out the liability limitation issue, I appreciate it !