Avoiding Litigation Thread.

[Keith Swift, PhD.]

Don't think I didn't want to. I tried, and couldn't get one attorney that would even entertain the idea. I hope to give a seminar on avoiding litigation at the next convention, and I'll use actual cases that are so bizzare as to be comical, but they're real and put a lot of hapless inspectors through the wringer. Remind me to tell you one about a water-slide and a veteran inspector who simply must be among the best in the world, and who is a decent, warm, and kind human being who was damn near driven to distraction by attorneys who should have been hung up by the thumbs.

[Keith Swift, PhD.]

PS As for going out of business, I'm working toward that day. Without tort reform, at least in California, inspectors don't stand a chance. However, I'm looking at various way of protecting myself, and others like me, and will keep you posted..

[jferry]

Originally Posted by kswift

I hope that this forum will become a place in which inspectors can learn the myriad ways in which they can avoid litigation, and not a place in which we debate legal and ethical issues. It really doesn’t matter what’s right and what’s wrong, it’s simply a matter of how we can hope to avoid litigation.

You can not hope to avoid litigation in a world where everything adverse that happens has to be somebody else's fault. This is not a legal problem; it is a cultural problem. I can not venture out socially - and I suspect that my experience is not atypical of the average lawyer's - without someone button-holing me with a query about his likelihood of success in pressing some claim to redress a real or imagined grievance. And you would be astonished at how trivial some of these alleged grievances are. Or, perhaps, you wouldn't be.

So I don't think your beef is, or should be, with the legal system.

Originally Posted by kswift

In my article “Perfectly Legal Extortion,” I reported that I was sued over suspect grading and drainage in the common areas of a condominium complex that was disclaimed in my standards of practice and specifically disclaimed in my report, and by persons who were not my clients, had not paid for my services, and had no ethical or moral right to my report. In addition to that threat to my livelihood, a member of my defense team, sent me a letter warning me that if the full amount of the lawsuit was not covered by my insurance that the plaintiffs could “look upon” my “personal assets” to “satisfy a judgment.” Don’t think that didn’t get me nervous.

That's a fairly typical action that stems from the insurer's own desire to keep from being sued by its insured. Even though there is zero likelihood that the claim against you would ever get anywhere near your limit of liability, because of the litigious American culture, insurers feel compelled to 'advise' you that, in this unlikeliest of events, the claimant could look to your personal assets to satisfy his claim.

My brother got such a letter from his insurance company lawyer in an automobile case where he had zero liability. He, of course, got as nervous as Keith did and called me. I immediately wrote to the insurer and demanded that it immediately tender its policy limits to the claimant to avoid the potential of my brother's assets being implicated. It was then the insurance company's turn to get even more nervous than Keith got. Since my brother's case was highly defensible - and resulted in a defense verdict for him - the insurance company lawyer called me and assured me that my brother's personal assets would never be an issue in the case.

Originally Posted by kswift

Within a few months the insurance company rolled-over and paid $8000.00. Was the lawsuit justifiable, right or wrong? It really doesn’t matter, and that’s why we’ve got to stop debating the minutia, and start suggesting ways in which we can avoid litigation.

Say what??!! It matters immensely. Insurers are not in the business of "roll[ing] over". They are in the business of paying legitimate claims and defending illegitimate claims. You don't say what the size of the claim was, what the theory of liability against you was or whether there were any other defendants in the case. So it is difficult to analyze whether or not paying $8,000 was a responsible or irresponsible business decision to make.

Originally Posted by kswift

I asked myself if the lawsuit could have been avoided. And, in retrospect, the answer was yes, it could have been, and I’ll tell you how. Realizing that my standards of practice and my contract are meaningless defenses against dishonorable people, I now evaluate anything that might result in a lawsuit, whether it is beyond my standards or disclaimed in my contract. I even warn my clients about the very real dangers of such things as diving boards, water-slides, ponds, fountains, and tree-houses, and recommend removing them. Also, anything that doesn’t meet current electrical standards is a potential safety hazard as far as I’m concerned, even a panel that is not neatly wired.

They are not meaningless defenses; they are outstanding defenses and regularly defeat bogus claims. And going beyond the SOP will open you up to even greater exposure to lawsuits.

Originally Posted by kswift

The other day, I evaluated the roof of a top-floor condominium, because I noticed a one-inch bubble on the master bedroom ceiling. Sure enough, the roof was in poor condition and had been unprofessionally patched above the unit, and I could just imagine my client being woken up in the middle of the night by water dripping on the pillow next to her head; would she have drifted back to sleep, soothed by the memory of my disclaimers? I don’t think so. I’d be looking at another lawsuit. Rest assured, there are terrorists among us. Take care.

Hardly. The roof is part of the common area. If the scenario you posit had come to pass, the roof would have been covered under the condo association's property coverage and the damage to your client's unit would have been covered under her property coverage. No claim against you would ever have been asserted.

[jferry]

Originally Posted by kswift

Don't think I didn't want to. I tried, and couldn't get one attorney that would even entertain the idea.

Does that tell you anything?

Originally Posted by kswift

I hope to give a seminar on avoiding litigation at the next convention, and I'll use actual cases that are so bizzare as to be comical, but they're real and put a lot of hapless inspectors through the wringer. Remind me to tell you one about a water-slide and a veteran inspector who simply must be among the best in the world, and who is a decent, warm, and kind human being who was damn near driven to distraction by attorneys who should have been hung up by the thumbs.

Don't wait for the convention. Tell us now.

[Joseph Hagarty, CMI]

Originally Posted by mcraig

I am with K. Swift on this.
I want to offer something to all of you to think about. Here in Arizona there is an interesting thing happening in legal matters against HI's. The lawyers are finding several Hi's that would know something because they use thermal imaging equipment or high tech equipment. All of the HI's out here don't have this equipment, But if you miss something that another HI would of found with High Tech equipment you loose even if you follow an SOP that says you don't look at that.
It has come to the point that you can be sued for anything and if the opposing side can come up with several of your local HI's that agree with them you will loose.
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Not necessarily.

My opinion, if an Inspector were to Lose based upon a representation of Incompetence thru failure to employ extraordinary means, the Insured's Attorney would be incompetent in the presentation of a defense.

I also offer a tiered approach to Inspections thru my Contract.

Services not performed are services Declined by the Client.

[Joseph Hagarty, CMI]

Originally Posted by jferry

That's a familiar situation that arises every time there is a technological advance in any profession. If the reasonable HI is using this equipment, then that becomes the standard.

RR has written extensively on his tiered pricing approach to inspections. If you want a regular old inspection, it's going to cost X. If you want the super-duper inspection, it's going to cost 3X.

You have to factor these cirumstances into your pricing. Otherwise, you are leaving yourself vulnerable to a lawsuit if the defect would have been found had you used this equipment.

Exactly.

No failure to provide the service. Service was offered, via the contract, and declined by the Client as attested to by signature of the parties. .

[jferry]

Originally Posted by kswift

PS As for going out of business, I'm working toward that day. Without tort reform, at least in California, inspectors don't stand a chance. However, I'm looking at various way of protecting myself, and others like me, and will keep you posted..

If this were true, it would be impossible for Home Inspectors to get E & O insurance in California or the rates would be outrageous, neither of which is the case.

[rwand1]

Joe you said above..

And going beyond the SOP will open you up to even greater exposure to lawsuits.

How so? I would think it would lessen your liability. You are more liable to be sued by not meeting the SOP. By charging for more in depth inspections you are in fact exceeding the SOP as there are no home inspection standards that I am aware that exceed the current industry SOP's.

Cheers,

[jferry]

Originally Posted by rwand1

Joe you said above..

How so? I would think it would lessen your liability. You are more liable to be sued by not meeting the SOP. By charging for more in depth inspections you are in fact exceeding the SOP as there are no home inspection standards that I am aware that exceed the current industry SOP's.

Cheers,

If your Inspection Agreement says that you are only responsible for inspecting X and you opine on X+++++, you have effectively waived your disclaimers.

[Bruce A. King]

Joe,

Would this statement in the agreement prevent waiving disclaimers?

In some cases the Standards may be exceeded as added value for the Client. This is at the Inspectors sole discretion and in no way will cause any deviation from this Agreement.

[jferry]

Originally Posted by bking

Joe,

Would this statement in the agreement prevent waiving disclaimers?

In some cases the Standards may be exceeded as added value for the Client. This is at the Inspectors sole discretion and in no way will cause any deviation from this Agreement.

It's better than not having it. I think a better idea is to have tiered pricing with a declination line signed or initialed, like when you decline the collision damage waiver on car rentals.

That way, you can increase your revenue, if the client accepts, meet the market pricing, if he doesn't and at the same time confirm that he knows you're only doing a limited inspection.

Check out RR's voluminous posts on his tiered pricing schema.

[Keith Swift, PhD.]

I can appreciate that Joe wants to defend his chosen profession, and don't disagree with most of what he has to say, and the only point that I've been trying to make is that we should all do what we can to avoid litigation, not that everyone has to agree with each and every suggestion that is made in this forum. Attorneys keep touting that our best defense is our contracts and our standards, and there's some truth in that. But my experience has taught me that they are not enough, and that we have to go beyond them. More than one attorney has told me that at least one clause in my contract is exculpatory and won't hold up in court, but because it's reasonable and rational it will stay in, and if it dstops just one of my clients from calling an attorney then it works. Let me share one very significant California court case. The daughter of a maid climbed up on an empty fountain, which toppled over and killed her. The inspector was sued and won because his standards prevailed, but what did he win? He lost time, and he lost money. But, here's my point. As soon as I heard about this, my first thought was: "My God, how many properties have I inspected that had fountains, about which I said absolutely nothing." Then I realized that it was within my power to prevent such a tragedy and to "avoid litigation" by simply alerting my clients to the fact that fountains can be dangerous, and by recommending removing them. That's what I mean about avoiding litigation. Winning lawsuits is not the point. As regards E&O insurance companies, they are not in the business of defending justice but in making money, and I understand why they roll-over. One that I'm aware of is considering NOT writing policies in California. Don't ask me which one, because I was told in confidence, and will not betray a trust. As to justice and the law, I have never sued anyone, although I've had several opportunities (it's not in my nature) and the only lawsuit that I've ever researched was one involving a chain-smoking, falling-down-drunk inpsector who was to be an expert witness against me, and I wanted to make sure that my attorney was prepared. In regard to "teasing" about lawuits that have made a mockery of justice, I've discussed all of them in the twenty-five or so articles that I've posted on the NACHI message board, But here's a summary: an inspector in CA was sued over a pool that didn't exist when he did his inspection (dragged on for years, and cost him about five-thousand); an inspector was sued by someone who chose to dive from the top of a water slide into the shallow end of a pool and ended up in a wheelchair. The insurance company rolled-over and assigned the inspector two defence attorneys, one to advice him about the other warning him about the threat to his personal assets (a devastating lawsuit). As to one of mine: my report stated words to this affect (I don't want to look it up again): "The family room was created from reclaimed foundation space, probably without permit, and will be subject to moisture intrusion." Iwas sued over "questionable" moisture intrusion entering the family room, and my insurance company rolled over. As to attorneys, I've written about them too, one is a champion of justice and a hero of mine, others that I've met have not shown an ounce of respect for truth and justice, and deserve to bare the brunt of viscious attorney jokes that many of us are learning to appreciate. Do you really think those nasty jokes are without cultural relevance? You're right about the cultural part; we are a litigious society, which is why I've been eager to get a "Forum." Lastly, I'm a very private person, and really don't enjoy even the exposure of the message board.

[rwand1]

If your Inspection Agreement says that you are only responsible for inspecting X and you opine on X+++++, you have effectively waived your disclaimers.

I exceed them all the time and it has actually saved my bacon. (i.e. there is nothing in the SOP or my disclaimers that I do or don't inspect wells) I inspect them visually and have forwarned my clients about concerns, only to find out there is a problem when the environmental people come out. I guess that is were experience and length in business come into play.

[jferry]

Originally Posted by rwand1

I exceed them all the time and it has actually saved my bacon. (i.e. there is nothing in the SOP or my disclaimers that I do or don't inspect wells) I inspect them visually and have forwarned my clients about concerns, only to find out there is a problem when the environmental people come out. I guess that is were experience and length in business come into play.

From the SOP:

"II. The inspector is not required to:

A. Inspect or operate screens, storm windows, shutters, awnings, fences, outbuildings, or exterior accent lighting.
B. Inspect items, including window and door flashings, which are not visible or readily accessible from the ground.
C. Inspect geological, geotechnical, or hydrological conditions.
D. Inspect recreational facilities.
E. Inspect seawalls, break-walls and docks.
F. Inspect erosion control and earth stabilization measures.
G. Inspect for safety type glass.
H. Inspect underground utilities.
I. Inspect underground items.
J. Inspect wells or springs.
K. Inspect solar systems.
L. Inspect swimming pools or spas.
M. Inspect septic systems or cesspools.
N. Inspect playground equipment.
O. Inspect sprinkler systems.
P. Inspect drain fields or drywells.
Q. Determine the integrity of the thermal window seals or damaged glass."

How does one "visually" inspect a well?

[Joseph Hagarty, CMI]

Originally Posted by jferry

From the SOP:


"II. The inspector is not required to:

A. Inspect or operate screens, storm windows, shutters, awnings, fences, outbuildings, or exterior accent lighting.
B. Inspect items, including window and door flashings, which are not visible or readily accessible from the ground.
C. Inspect geological, geotechnical, or hydrological conditions.
D. Inspect recreational facilities.
E. Inspect seawalls, break-walls and docks.
F. Inspect erosion control and earth stabilization measures.
G. Inspect for safety type glass.
H. Inspect underground utilities.
I. Inspect underground items.
J. Inspect wells or springs.
K. Inspect solar systems.
L. Inspect swimming pools or spas.
M. Inspect septic systems or cesspools.
N. Inspect playground equipment.
O. Inspect sprinkler systems.
P. Inspect drain fields or drywells.
Q. Determine the integrity of the thermal window seals or damaged glass."

How does one "visually" inspect a well?

I have inspected active and functioning Spring Houses in this area.

http://waltonfeed.com/old/springhs.html