by Nick Gromicko, CMI® and InterNACHI's Legal Team
We sometimes see inspectors refer to themselves as an “expert” on their websites or in marketing materials. With so many inspectors competing for business, it is natural to want to stand out. However, inspectors who describe themselves as “experts” may unknowingly be creating potential legal problems for themselves if an unhappy customer sues them. There are many legal theories an unhappy customer may attempt to employ if the s/he files suit.
Under the standard InterNACHI Residential Inspection Agreement, the inspector agrees to perform the inspection in accordance with InterNACHI’s Standards of Practice. But when an inspector claims to be an “expert,” a court may hold the inspector to a higher standard. This is particularly true if the inspector claims to be an expert in a specific aspect of home inspections, such as the inspection of log homes. Just as a primary care physician is not held to the same standard as a board-certified neurologist, an inspector claiming expertise in log homes may be held to a higher standard than other inspectors. In European Bakers, Ltd. V Holman, 338 SE2d 702 (Ga. App. 1985), an insurance agency held itself out as an expert in certain types of insurance matters. The court ruled that by doing so, the agency imposed on itself a higher standard of care.
Even if a court does not hold an inspector to a higher standard, calling yourself an expert creates other potential legal claims.
Deceptive Trade Practices
Most states have statutes that prohibit deceptive trade practices. These laws make it illegal to make a false representation as to the quality of services you provide, or to represent that the services are of a particular quality if you know they are not. See, for example, § 6-1-105 of the Colorado Revised Statutes. These statutes generally allow a successful plaintiff to recover treble damages, as well as attorney’s fees and court costs. In some jurisdictions, home inspectors are considered professionals and are exempt from the deceptive trade practices act, but in other jurisdictions, they are not.
Breach of Contract
Holding yourself out as an expert plays a role in influencing potential customers to choose you. If a problem arises after your inspection, an unhappy customer may claim that you breached the contract by failing to provide the expertise you claimed to possess.
In addition to any negligence, contract or statutory claims that an unhappy customer may assert against you, s/he may also allege the tort of misrepresentation. You may be liable for misrepresentation if you make a false statement, the statement is material, and the customer relies on your statement to his or her detriment. Under the law, both negligent misrepresentation and intentional misrepresentation may give rise to liability. Intentional misrepresentation may result in an award of punitive damages.
It is even possible that a court may hold that by declaring yourself an expert, you made an implied warranty to the customer concerning the quality of your services.
E&O Insurance Claims
If you dig deep enough into your Errors and Omissions insurance policy, you'll likely find clauses that void your policy if you make false claims about yourself or the services you offer. It's called "misrepresentation in advertising." Your insurance claim could be denied because you violated the terms of the policy by calling yourself something you aren't. If you aren't a bona fide expert, don't advertise anywhere that you are.
How a Plaintiff’s Lawyer Will Use Your Claim of Expertise Against You in Court
You did everything right. The customer signed a contract before you performed the inspection. You performed your inspection in accordance with InterNACHI’s Standards of Practice. You wrote a thorough, professional report. Your customer purchased the home and later discovered an alleged defect. Now, the unhappy client has sued you.
Once the customer files the lawsuit, their lawyer will depose you. At your deposition, that lawyer will hand you a copy of every web page, business card, brochure, or other publication where you claimed to be an “expert.” The lawyer will ask you to look at each one and verify that you created those things. With regard to each one, the lawyer will ask, “You chose to declare yourself an expert, isn’t that correct?” You will have to admit that you did. Then the lawyer will ask, “You did that to persuade potential customers to choose you, correct?” Again, you will have to admit that you did. Next, the lawyer will ask, “You intended that my client would rely on that representation, correct?” You will have to admit that you did. Next, depending on the nature of the case, the lawyer will ask something like, “Would you agree that an ‘expert’ home inspector should report all indications observed of active roof leaks?” You will have to agree. Finally, the lawyer will ask, “But you did not do that, did you?”
Now, suppose the case does not settle and the jury selection process is about to begin. When the plaintiff’s lawyer starts to question the potential jurors, one of the questions the lawyer will ask them is, “What does the word ‘expert’ mean to you?” The lawyer does not care that much how each potential juror answers the question — he’s trying to plant the seed in the minds of the potential jurors that you should be held to a higher standard.
Next come the opening statements. When the plaintiff’s attorney speaks to the jurors, you can bet the opening statement will include something like this: “In fact, the evidence will show that the inspector admitted that he chose to describe himself as an ‘expert’ in order to persuade my client to choose him. You will see pages from the inspector’s website where he repeatedly claimed to be an ‘expert.’”
But the fun is just beginning because, at some point, you will be called to testify, and that lawyer is going to ask you all the same questions you were asked during your deposition.
When all the testimony has been presented, the judge will instruct the jury on the law. This may include an instruction that an “expert” is held to a higher standard of care.
Finally, it will be time for closing arguments. You can be sure that the plaintiff’s closing argument will contain the word “expert” many times.