Editor's Note: This is an actual claims rebuttal letter sent to opposing counsel, written by a claims adjuster on behalf of an OREP insured. It illustrates the value of having a professional in your corner when trouble arises. The names have been changed.
Insurance: Claim Rebuttal Letter
January 3, 2011
Via Fax & Regular Mail
Personal & Confidential
Claim No.: 6977
Dear Mr. Smith:
letter serves to acknowledge our receipt of a claim made by Phil Suesalot
against John Insured. XYZ Claims Managers is the third party claims
administrator for the Underwriters of Mr. Insured’s Professional Liability
insurance carrier. According to the August 21, 2010 letter you sent to Mr.
Insured on behalf of your client, Mr. Suesalot, you state that the property
which Mr. Insured inspected for Mr. Suesalot, 567 Austin Rd., Houston, TX
75013 (the “Property”), was found to have alleged floor defects, repairs of
which totaled $14,202.90. You enclosed a letter from Art Repairshigh with
Home Fix Company, who was the contractor hired by Mr. Suesalot to make the
aforementioned repairs to the Property. Of great importance, Mr. Repairshigh
states in his letter that “[u]pon removal of carpet and vinyl we
discovered…” the alleged flooring defects to the Property.
Further, the section of the Agreement entitled SCOPE provides that, “[t]he inspection to be done is limited to those reasonably accessible items (or parts of items) by visual inspection only. Discovery of defects which are latent or concealed is not within the scope of the inspection.” (emphasis added).
Moreover, the Property Inspection Report (the “Report”) prepared by Mr. Insured for the Property states, “[t]he inspection is of conditions which are present and visible at the time of the inspection…” (emphasis added).
As stated in the Agreement, the scope of the inspection services provided are defined and limited in accordance with the Texas Real Estate Commission Standards of Practice, Texas Administrative Code sections 535.227 through 535.231. Section 535.227 (b) Scope states, “(2) The inspector shall: (A) inspect items, parts, systems, components and conditions which are present and visible at the time of the inspection…” (emphasis added). Further, (c) Departure Provision of this same section states, “(2) An inspector may exclude any part, component or system required for inspection by the standards of practice which is inaccessible…” (emphasis added).
In the Report, section 1. STRUCTURAL SYSTEMS, A. Foundations, Mr. Insured specifically states that, “[t]he condition of the foundation/slab/flooring underneath coverings, carpet, tile, vinyl etc. are obscured from view, and are specifically excluded from report.” (emphasis added). Mr. Insured, in the “Summary of Findings” section of the Report, then states, as to CEILINGS AND FLOORS, “[a]s you enter dining area from rear family room flooring is uneven (bowing), appears to be add-on and reason unknown by the inspector.”
To the extent that Mr. Insured was able to observe any alleged flooring defects, he noted those, as indicated above, in the Report. However, any further alleged defects not visible at the time of his inspection were specifically excluded from the inspection, as noted in the Agreement, Report and Texas Administrative Code guidelines for home inspections. Mr. Suesalot’s own contractor even specifically reported that it was not until he removed floor coverings that he was able to observe the alleged flooring defects that are the subject of this claim.
Further, section of the Agreement entitled, NOTICE OF CLAIM AND MITIGATION OF DAMAGES states:
Client [Mr. Suesalot] agrees to give [Mr. Insured] reasonable written notice of any claim under this contract or resulting from any inspection performed by [Mr. Insured] (“the claim”). During a 35 day period after the date [Mr. Insured] receives written notice of the claim and on [Mr. Insured’s] written request, client will give [Mr. Insured] a reasonable opportunity to inspect and have inspected the property and/or condition that is subject of the claim for purposes including, without limitation, the following: to determine the nature and cause of the defect or complaint and the nature and extent of repairs needed to remedy the defect or compliant, if any. [Mr. Insured] may take reasonable steps to document the defect or complaint. In the event of a claim under this contract or as a result of the inspection performed by [Mr. Insured], Client agrees to take all reasonable steps to mitigate client’s damages, giving [Mr. Insured] notice of the claim and the opportunity to inspect the premises as soon as practicable so that [Mr. Insured] may have input into the mitigation process. [Mr. Insured] will not be responsible for any damages caused by Client’s failure to reasonably notify [Mr. Insured] of any claim or to mitigate clients damages.
Mr. Suesalot wholly failed to timely and properly give Mr. Insured notice of this claim, as provided in the above-referenced Agreement language. As such, Mr. Insured was not provided an opportunity to re-inspect the condition that is the subject of this claim and, as such, is not responsible for any alleged damages thereto.
Based on the above, we do not find that Mr. Insured has any liability and/or responsibility for the alleged flooring defects cited in your claim. Mr. Insured properly performed the inspection of the Property and noted all visible defects or deficiencies he was required to identify pursuant to the Agreement, Report and Texas Administrative Code.
If you have any questions, please do not hesitate to contact me at (800) 555-5555, or at my direct dial (555) 555-5525. Please direct all future correspondence to my attention and include the claim number noted above.
Disclaimer: This article is written from an insurance perspective and is meant to be used for informational purposes only. It is not the intent of this article to provide legal advice, or advice for any specific fact, situation or circumstance. Contact legal counsel or insurance agent for specific advice.
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