claim stories

Law of Damages (Part 2 of 2)

To be an effective advocate for his clients, a lawyer often needs to call upon skills quite apart from a thorough working knowledge of the substantive and procedural law. And if he practices in the northeastern section of the country, as I do, one skill that he will find to be of inestimable utility is a working knowledge of Yiddish. And, particularly so, if he is an Irish-Catholic.

With that bit of information as background, let us return to the most recent post, briefly. Please recall that I had responded to a claim from a home inspector’s client by informing the client that he had no claim because the inspector had executed his duty to him in a professionally reasonable manner, that the client had acted unreasonably in light of the inspector’s findings and that, in any case, his damages were, at best, de minimis.
(more…)

(more...)

Claims on Concealed Issues at Time of Home Inspection

A few months ago, I got a call from a home inspector in California about a claim some prior client had lodged against the inspection firm for whom he had previously worked and had conducted the inspection in question. This particular firm is exceedingly risk-averse and settled very quickly with the dissatisfied client rather than turn the claim into its E and O for home inspectors insurance, a posture toward claims that, according to the inspector, this firm enthusiastically embraces. And one, I might add, that I thoroughly discourage.

The firm was now seeking reimbursement of its $4,000 payment to the client from its former employee through Small Claims Court. It does not seek reimbursement from current employees for claims that it pays resulting from inspections that they perform. So there was an element of retribution contained in its action against the former employee.

I coached the inspector on the law and the appropriate deportment that he should exhibit in Small Claims Court, gave him dispositive state court case authority and he walked away a winner after advising the judge of the Voluntary Payment Doctrine that I discussed here last week.
(more…)

(more...)

When the Home Inspection Report Speaks for Itself

Since this website launched in early December 2010, I have received a steady stream of correspondence from home inspectors asking my opinion on a wide variety of topics related to home inspections. Frequently, these inquiries inspire an article. So keep them coming.

A while ago, I got an interesting question from a reader about an inspection conducted for a young couple.  The mother of one of them was financing the contemplated home purchase and was a looming presence during the home inspection and the inspector had heard her opine that she didn’t like the house because it was “too small.”  The couple was represented by a buyer’s agent and the inspector knew both the buyer’s agent and the seller’s agent professionally.

Afterward, the inspector discussed the findings in detail with the couple who seemed to find the discovered deficiencies manageable and were allowing how they would go about rectifying them. That was on Friday.
(more…)

(more...)

Home Inspection Claims and the Legal System

If you read home inspection industry message boards with any level of fidelity, you cannot fail to notice a general lack of confidence in our legal system among home inspectors. They never expect to get a fair shake in court. And especially in Small Claims Court.

To someone who has spent most of his adult life upholding the legal system, I find this overarching despondency troubling. And quite unwarranted in my experience. Nevertheless, I completely understand why home inspectors feel that way.

In the overwhelming majority of cases against home inspectors that I have handled, claimants and their lawyers are not only constantly vastly overestimating the level of their damages, they do not even recognize that they do not have a case in the first place. While I am not surprised that home inspection claimants might make those mistakes, I am continuingly astonished that their attorneys do.
(more…)

(more...)

Is Your E & O Insurance Company Stuck on Stupid?

One of my home inspector clients in California recently wrote to me about a home inspection claim that was being brought by a client for whom he had performed an inspection about three months earlier. The client was experiencing some leaks due to recent heavy rains. The leaks were discovered only after removing baseboard and flooring to do some remodeling. After opening the walls they found that the leaks were due to the fact that the vapor barrier had been torn in several areas.

A review of the inspection report demonstrated that the inspector had noted that “stains were observed at baseboard, dry at time of inspection, unable to determine cause, advise review with seller.” Photos of the area taken at the time of the inspection completely support the inspector’s position.

The clients were quite upset and were unwilling to grasp the fact that, since the defect was not visible during the inspection, the inspector was not liable. They subsequently threatened to file suit if the inspector did not refund the fee.

Since he was clearly not responsible for the clients’ problem, he refused to refund the fee and the client followed through on the threat and filed a claim in small claims court.
(more…)

(more...)

In Your Deposition, Be Frank, Not a Weiner

As someone who writes on a regular schedule – every Monday and Thursday – I often never know what I will write about until the deadline becomes an almost palpable looming presence. The hardest part for me is actually selecting a topic. Once I have done that, the post almost writes itself. Fortunately, current events often have a way of suggesting topics for me. So, thank you Anthony Weiner.

In the home inspector training at the Law and Disorder Seminar, I spend a good amount of time on the legal process. Part of that is spent on the Discovery phase of a lawsuit which is when parties “discover” what evidence the other parties intend to present in order to prove their claims or defenses and one of the most productive discovery devices is the deposition.

Lawyers take depositions, which are interrogations of witnesses, taken under oath and recorded by a court reporter, for three distinct reasons. The first reason is to lock the witness into his story so that he doesn’t tell a different story at trial or, if he does change his testimony at trial, so that the lawyer can use the witness’s prior inconsistent testimony to impeach his credibility. The second reason is to ascertain the witness’s credibility. Does this witness tell a story that is believable? The third reason is to ascertain the witness’s likability. Is this witness someone whom a jury is going to like and – more importantly – give money to? Or if the witness is a defendant, is she a witness that a jury will be reluctant to hold culpable?
(more…)

(more...)

Myth # 2 The Limitation of Liability Clause Is the Greatest Thing Since Night Baseball

There is absolutely nothing that a home inspector likes better than limiting her liability. And there is nothing that limits a home inspector’s ability to make money more than clinging to this completely unnecessary clause that is way past its sell-by date.

Home inspectors love limitation of liability clauses – also known as exculpatory clauses – because, in the majority of US jurisdictions, they are routinely enforced on freedom-of-contract grounds and, thus, effectively put a cap on the inspector’s potential liability to her client for professional negligence. Indeed, every home inspector association and every home inspector franchisor actively encourage their members and franchisees to embrace this evolutionary holdover. And you would be hard pressed to find a home inspector forum whose contributors do not wax enthusiastic about the preternatural cleverness of their personal attorneys who counseled them to include such a clause in their pre-inspection agreements.

One problem with exculpatory clauses, of course, is that they also put a cap on the inspector’s earning potential. What sophisticated purchaser, in her right mind, would hire a professional home inspector who limited her liability? That’s a rhetorical question that answers itself. The sophisticated consumer will pay hundreds of dollars more to secure the services of an inspector who does not limit her liability – and makes the point in her marketing material that, unlike her lowball competition, she stands behind her inspection reports.
(more…)

(more...)

Myth # 3 Transfering Assets To One’s Wife Insulates Them From Creditors

There was a recent story in the local news about a lawyer who accidentally killed a fellow hunter last deer season. The lawyer was a convicted felon, a circumstance that not only should have precluded his admission to the bar but also under Pennsylvania law, precluded him from owning or possessing firearms of any sort.

As you can imagine, the lawyer is in a heap of legal trouble. He recently pleaded guilty to two felony counts of illegal possession of firearms and no contest to a charge of involuntary manslaughter and faces 12½ to 25 years in prison when he is sentenced later this summer. But he also faces massive civil damages from a wrongful death suit filed by the slain hunter’s widow.

Recently the widow requested the Bucks County Court of Common Pleas to void the transfer of four parcels of land that the lawyer, in a ham-fisted attempt to shield assets from what figures to be an enormous civil judgment, had sold to his mother for one-dollar and a fifth that he had sold to his sister for the same amount following his arrest last December.

That development reminded me of a frequent observation made on home inspection forums and to me at the Law and Disorder seminar that “putting everything in [one’s] wife’s name” would render an inspector judgment-proof and, thus, eliminate the need for an inspector to carry professional liability insurance. This, I suppose, is a corollary to the E-and-O-puts-a-target-on-your-back theorem that is so widely embraced in this industry.
(more…)

(more...)

Myths That Home Inspectors Should Stop Believing

Myth # 1: Only Incompetent Inspectors Ever Have Claims

In these next series of posts, I am going to be debunking several myths that home inspectors should stop believing about their profession and the law. One such belief is that only incompetent inspectors ever have professional liability claims. So if you’re a good inspector you have little to worry about.

Now that I am nearly five years into my total immersion in the trials and tribulations of home inspectors, I can state with complete confidence that the overwhelming majority of home inspectors never ever expect to have a claim made against them for a home inspection that they conducted. I know this because when they contact me after they have received some ugly correspondence from a client or a client’s lawyer, they invariably tell me “Joe, I’ve inspected over X thousand houses and this is the first time I’ve ever had an issue with any inspection.”

And the thing of it is the guys are very competent inspectors but they mistakenly thought that being competent is the key to a claim-free existence. If only that were true. It should be true. But it isn’t.
(more…)

(more...)

How Long Should Home Inspectors Hold on to Written Reports?

The other day, I received a comment from Naperville, Illinois Home Inspector Carol Fisher to a recent post on how long inspectors need to hold on to inspection reports.

Carol, who posed the original question, wrote: “The answer you gave is safe.  Of course I would save my digital reports, but some of us have been out there in the dinosaur era when they weren’t digital. Plus even today I still have paper relative to each report that I still need to keep even if the inspection report is digital. I have 21 years of reports and I would like to get rid of some of them. There must be some limit of liability to this industry or case law that would help in validating a time frame.”

Point taken. I confess that, in responding to Carol’s original question, I hadn’t even considered that the legion of home inspection pioneers who created this industry generated their reports the old-fashioned analog way. I’ll try to rectify that oversight with this post.

As I have repeatedly pointed out on this site and in home inspector training seminars, claims that are made against home inspectors almost never have any validity. And the proof of that can generally be found in the inspection report itself. It is the inspection report that is of inestimable help to me in responding to claims on behalf of home inspectors. So hanging on to them for some length of time is a matter of considerable self-interest.
(more…)

(more...)