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Inspector Faces $6.4M Lawsuit Over Failure to Inspect Adjacent Lot

 by Kendra Budd, Editor

Home inspectors have long repeated a familiar refrain: “We can’t see through walls.” But if a recent $6.4 million lawsuit is any indication, they may need to add: “And we can’t inspect your neighbor’s property, either.”

That’s the core issue at the center of a developing lawsuit in Greenwich, Connecticut, where a homeowner is suing his inspector for allegedly failing to identify deteriorating powerlines—located not on the subject property, but on an adjacent parcel. According to the Complaint, the off-site powerlines provide electricity to the inspected home and have led to repeated power outages, costly repairs, and a potential six-figure solution to reroute the power entirely.

So far, the case has raised eyebrows among legal experts and home inspectors alike, with many watching closely to see whether the court entertains a homeowner’s claim that the inspector should’ve identified hazards outside the scope—and property lines—of a standard home inspection.

Here’s what we know so far.

Background
In 2023, Dominick Colabella (the buyer) learned that a 7.3-acre estate, including a 13,801-square-foot home complete with five bedrooms and 10 bathrooms was available for acquisition on the New York-Connecticut border. The property was inspected by Michael Colavecchio in February 2023, the manager of Cronus Home Inspection. Colavecchio was specifically requested by Colabella to create a detailed inspection report. This was so Colabella could consider whether he would need to negotiate the terms of acquisition or if he wanted to buy the property at all.

In fact, this wasn’t the first time Colavecchio had inspected a property for Colabella. According to court documents, Colabella had hired Cronus Home Inspection prior to 2023 to perform home inspection services on a different residential property. Colabella had supposedly been tremendously satisfied with Colavecchio’s knowledge of the area while performing the first home inspection. This led Colabella to “[develop] a level of comfort with and reliance on [Cronus Home Inspection]” said the court filing. Additionally, given their “special relationship”, as the Complaint suggests, Colabella assumed the home inspector’s efforts would be even greater than before:

Colabella, reasonably believed that by hiring the Defendants they would go above and beyond expectations, but certainly would at least meet expectations by inspecting entire properties, and would be able to identify and make Colabella aware of any potential threats to a property as they had done previously.

So, what was it that this home inspector allegedly missed on the property and turned a once prosperous relationship sour? Well, Colavecchio stands accused of not inspecting the property’s boundary line.

Indeed, in the Complaint, filed May 28th, 2025 in a U.S. District Court, of White Plains, it is alleged that Cronus knew what Colabella’s expectations were regarding home inspection—specifically that he expected Colavecchio to “identify any potential hazards or impacts from adjoining properties.”

What Went Wrong
Shortly after acquiring the property, Colabella discovered that the house would consistently lose power on multiple occasions at seemingly random times. The cause of these outages was soon discovered to be powerlines on the adjacent property that had become damaged due to a tree falling.

Colabella soon realized that the electrical power was completely dependent on the existence and functionality of these powerlines—and due to them being located on private property, he had no control of their conditions. According to Colabella, the powerlines were running through a “heavily forested” area and not only were these powerline service poles old, but they were also allegedly rotting. Furthermore, the powerlines were often prone to damage due to inclement weather.

Due to the repeated damage to the powerlines, Colabella’s lawyers are asserting that he has “incurred damages in the amount of at least $300,000 due to repairs” and will continue to incur costs imposed by the utility provider. In fact, Colabella is heavily considering taking out the powerlines altogether to run them underground to prevent further damage—which would ultimately require a hefty fee.

Blaming the Home Inspector
Colabella believes Cronus Home Inspection and Colavecchio should shoulder the burden for the cost of repairs because he was allegedly reassured by Colavecchio that he would inspect the adjacent properties as “any reasonable home inspector would.”

It’s important to note that nothing in the home inspection report outlined that Colavecchio agreed to inspect the surrounding properties, nor that he had done so during the inspection. In his report to Colabella, it reads:

The electrical systems appear to be in good overall condition. The size of the electrical service is sufficient for a house of this size and configuration. The electrical panels are well arranged and all breakers appear properly sized. Ground fault circuit interrupter (GFCI) and arc fault circuit interrupter devices have been installed in some areas and most tested properly. GFCI and arc fault devices offer an extra level of shock and fire protection. A large propane-fired emergency generator on the left exterior supplies backup power to the house.

The report goes on to indicate that Colavecchio also inspected the size of the electrical service main and service entrance wires and meter, as well as the electrical systems. He never once notes that he inspected the adjacent property’s powerlines.

However, Colabella’s legal team is digging in on a creative loophole—that the inspector hadn’t included “source of electrical power to the Premises” in the Limitations of Electrical System Inspection included in the inspection report either. Colavecchio’s Limitation of Electrical System Inspection reads as follows:

The inspection does not include electrical code compliance, emergency generators, low voltage systems, telephone wiring, intercoms, alarm systems, TV cable, home automation, audio/video systems, networks, computers, timers or smoke/carbon monoxide detectors. The inspection of the electrical system was limited by, but not restricted to:

• Electrical components concealed behind finished surfaces could not be inspected.
• Only a representative sampling of outlets and light fixtures were tested.
• Furniture and/or storage can resist access to some electrical components.
• Insulation and HVAC equipment/ducting and stored items limited the inspection of some electrical components.
• Emergency backup generators and associated equipment are not tested or evaluated.

The document, not excluding an inspection on the source of electrical power, has seemingly become Colabella’s legal team’s main sticking point, as well as the allegation that Colavecchio said he would do so. Whether or not the latter is true, Colabella is adamant this could have been avoided if Colavecchio had inspected the adjacent properties for such deficiencies. Well, Cronus Home Inspection and Colavecchio don’t agree with Colabella’s accusations.

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Cronus Home Inspection’s Response
Colavecchio as well as Cronus Home Inspection have remained quiet on this lawsuit, however they did file a Motion to Dismiss the case on July 7th, 2025. The Motion argues that Colabella has no legal standing to sue the company as the lawsuit lacks sufficient evidence. Cited in the Motion, Brown v. Daikin Am. Inc., states “A complaint must be dismissed if it does not plead enough facts to state a claim to relief that is plausible on its face.” The Motion also refers to several other lawsuits that ascertain a case should be dismissed if it is lacking adequate evidence that the Plaintiff was negligent.

According to New York law (where the case is being tried), to successfully state a claim for gross negligence a plaintiff must allege the following four factors:

1. the existence of a duty;
2. a breach of that duty;
3. injury as a result thereof;
4. and conduct that evinces a reckless disregard of the rights of others or smacks of intentional wrongdoing.

The Defendant’s lawyers are asserting that Colabella’s accusations of negligence do not fit this definition. “Nowhere in the Complaint does Plaintiff point to evidence suggesting that Defendant’s conduct in omitting the electrical issues at the home from his report was intentional,” read the Motion. It continues to point out how the claims that were “so careless as to show complete disregard for the rights and safety of others,” are completely unfounded due to this lack of evidence—thus not fitting under the fourth definition of gross negligence.

Furthermore, Cronus Home Inspection’s legal team pointed out how Colabella neglected to attach the full Inspection Agreement to the original Complaint. They allege that a court would not be able to properly consider the accuracy of the Complaint without a copy of the agreement. So, the Defendants not only attached the Inspection Agreement to their Motion, but the entire Home Inspection Report as well.

In the Motion to Dismiss, the Defendant’s included passages from the Inspection Agreement that outlines what was and wasn’t covered. “Cronus, LLC will be conducting a non-invasive, visual inspection of the apparent condition of the visible, major components of the property,” stated the agreement. Additionally, the Inspection Agreement also included a clause titled “WHAT IS NOT INCLUDED” wherein both parties agreed upon:

This inspection will be of readily accessible areas of the building and is limited to visual observations of apparent conditions existing at the time of the inspection only. Latent and concealed defects and deficiencies are excluded from the inspection and report. The Inspector is not required to move objects obstructing his or her view or access.

With both parties agreeing on this, Colavecchio’s lawyers argue that Colabella has failed to adequately plead a viable claim of gross negligence and has not presented any facts to support the accusation that Colavecchio violated the agreement. Additionally, the Motion maintains that even if Colabella’s accusations asserting Colavecchio failed to inspect the potential hazards from adjoining properties, that “this was simply not something that he was expected or required to do under the Inspection Agreement or any pertinent State regulations.” In other words, an inspector is not required to inspect adjoining properties.

In fact, it “would be unfeasible, contrary to longstanding precedent and relevant regulations, and State criminal law to require a home inspector to trespass onto adjoining private residential property as part of a routine home inspection,” the Motion clearly states.

They also allege in the Motion that Colabella does not provide enough proof in the Complaint of the Inspection Agreement to sustain a breach of Fiduciary Duty against their client—specifically in regards to their relationship. Despite his assertions, Colabella does not provide any evidence of a “special relationship” between himself and Colavecchio. It is required under Murphy v. Kuhn, “A fiduciary duty does not exist absent a special relationship,” as cited in the document.

Due to Colabella’s lack of evidence, the Defendants are requesting that “the Court grant this Motion and dismiss the Complaint with prejudice.” Currently, the Motion remains in limbo.

Final Thoughts
While the outcome of this case remains uncertain, it underscores a growing trend: homeowners and attorneys looking for any angle—however novel—to hold inspectors liable. Whether or not Cronus’ agreement withstands legal scrutiny, the case is a sharp reminder that a well-drafted, comprehensive inspection agreement is one of the most powerful tools an inspector has to manage liability.

It’s not often that homeowners expect their inspector to assess adjacent parcels, but this lawsuit raises new questions about the evolving expectations—and potential liabilities—of the profession. Cronus Home Inspection and Colavecchio have submitted a Motion to Dismiss, and as of this writing, the motion has been dismissed. The case is expected to proceed sometime next year.

Inspectors should ensure their agreements clearly define the scope of the inspection, the limitations, and what is excluded—including any mention of adjoining properties or utility sources. As always, the goal is to prevent these types of claims from gaining traction in the first place.

Even with a signed inspection agreement, inspectors should be aware that homeowners and attorneys may still attempt to find creative ways to assign blame. That’s why it’s critical that your pre-inspection agreement is clear, specific, and legally robust. Whether Cronus Home Inspection’s agreement will hold up remains to be seen—but it serves as a reminder for all inspectors to regularly review and strengthen their contracts.

For practical guidance and vetted templates, visit WorkingRE.com and search “Inspection Agreement”.

This is a developing case—stay tuned for updates.

About the Author
Kendra Budd is the Editor of Working RE Magazine and Marketing Coordinator for OREP Insurance. She graduated with a BA in Theatre and English from Western Washington University, and with an MFA in Creative Writing from Full Sail University. She is currently based in Seattle, WA.

Published by OREP Insurance Services, LLC. Calif. License #0K99465