Home inspection litigation and proper notice

[tguthrie]

What is the name of your state?California
I own a home inspection business in California, and have been named in a lawsuit (along with the Realtor, Seller, pest inspector and roof inspector) stating problems with the home that were allegedly "covered up" by the seller and Realtor, and not listed in the various inspections as items of concern. My question is, the plaintiff never notified our company of any issue prior to naming us in the suit. Had they done so, we would have responded immediately by reinspecting the home, and trying to come to some kind of resolution if indeed we had missed something. Is there any case law in existence where a plaintiff has to give a defendant an opportunity to act in good faith with regard to these types of resolutions prior to pulling them into a lawsuit?

[seniorjudge]

"Is there any case law in existence where a plaintiff has to give a defendant an opportunity to act in good faith with regard to these types of resolutions prior to pulling them into a lawsuit?"

I doubt it. Settlement (or, in this case, non-settlement) discussions are generally considered irrelevant. This policy encourages settlement discussions.

There is no requirement that I know of that a plaintiff must contact the defendant and make a settlement demand before filing suit. There are some kinds of cases where that statement has a lot of qualifications, so ask your lawyer for the specifics.

As far as a defendant being allowed to perform some action (which is what your question was) before being sued, I am not familiar with any kinds of cases where that would happen.

But...educate me....

[HomeGuru]

What is the name of your state?California
I own a home inspection business in California, and have been named in a lawsuit (along with the Realtor, Seller, pest inspector and roof inspector) stating problems with the home that were allegedly "covered up" by the seller and Realtor, and not listed in the various inspections as items of concern. My question is, the plaintiff never notified our company of any issue prior to naming us in the suit. Had they done so, we would have responded immediately by reinspecting the home, and trying to come to some kind of resolution if indeed we had missed something. Is there any case law in existence where a plaintiff has to give a defendant an opportunity to act in good faith with regard to these types of resolutions prior to pulling them into a lawsuit?

**A: I presume that the Plaintiff is the homebuyer, your client. In that reguard, I refer you to read the terms and conditions in your IA. There should be a clause similar to the ones that ASHI and CREIA home inspectors use with respect to immediate notification, call backs etc. You also need to consult with your attorneya nd notify your E&O insurance carrier. Also, your IA should contain an arbitration clause, in which case your attorney should file a motion to dismiss you as a party to the litigation.

[tguthrie]

The inspection agreement we use does contain a time provision (1 yr from date of inspection) for call backs, as well as an arbitration clause, etc. Our E & O Insurance carrier's attorney is handling the issue for us. What I don't get is the attorney seems to be disregarding the terms of the agreement, which we thought was somewhat of a protection for us in entering this business segment. I will contact the attorney to find out if something can be filed to put us to arbitration(?). Perhaps he thinks we'll fare better with all the other parties involved (although he says "somehow" the property seller was dismissed from the case by the judge--it's on appeal). Thanks for the advice...

[HomeGuru]

The inspection agreement we use does contain a time provision (1 yr from date of inspection) for call backs, as well as an arbitration clause, etc. Our E & O Insurance carrier's attorney is handling the issue for us. What I don't get is the attorney seems to be disregarding the terms of the agreement, which we thought was somewhat of a protection for us in entering this business segment. I will contact the attorney to find out if something can be filed to put us to arbitration(?). Perhaps he thinks we'll fare better with all the other parties involved (although he says "somehow" the property seller was dismissed from the case by the judge--it's on appeal). Thanks for the advice...

**A: I suggest you have your attorney revise your IA after reviewing the ones used by ASHI and CREIA inspectors. There should be protection clauses such as limit of liability, time period notification, arbitration etc**************...
I am surprised your E&O insurance carrier does not require such clauses in your Inspection Agreement.

[tguthrie]

In response, our IA does state that our liability is limited to the fee paid for the inspection services and report. Additionally, in bold type it states any claims must be presented within 1 year from the date of the inspection, and that we will have no liability for any claims presented 1 year after the date of the inspection. Also, there is an arbitration clause in our agreement. I believe our report was fashioned after the ASHI or CREIA agreements, as we are part of a nationally known franchise, and didn't write it ourselves. With all this in there, you would think there would be more protection against litigation... Thanks.

[HomeGuru]

In response, our IA does state that our liability is limited to the fee paid for the inspection services and report. Additionally, in bold type it states any claims must be presented within 1 year from the date of the inspection, and that we will have no liability for any claims presented 1 year after the date of the inspection. Also, there is an arbitration clause in our agreement. I believe our report was fashioned after the ASHI or CREIA agreements, as we are part of a nationally known franchise, and didn't write it ourselves. With all this in there, you would think there would be more protection against litigation... Thanks.

**A: there is protection against litigation- it's the arbitration clause.
But I know what you mean.

[mordred31]

California Civil Code 9175 does not allow a home inspector to limit his/her liability to the cost of the inspection. If you are a CREIA member I suggest you use their contract.
If you're an ASHI member I would still use the CREIA contract. You can purchase inspection contracts directly from the California Real Estate Inspection Association. Your attorney assigned to your case by your E&O policy I'm sure is aware of this civil code. (I hope)

Mordred

[Zigner]

California Civil Code 9175 does not allow a home inspector to limit his/her liability to the cost of the inspection. If you are a CREIA member I suggest you use their contract.
If you're an ASHI member I would still use the CREIA contract. You can purchase inspection contracts directly from the California Real Estate Inspection Association. Your attorney assigned to your case by your E&O policy I'm sure is aware of this civil code. (I hope)

Mordred

This thread is nearly 5 years old. Please watch the dates. This matter was surely settled YEARS ago.