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Being Sued

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Bill S

Junior Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Illinois
It finally happened. Slight foundation settling - wrote it in the report - required engineering report - etc... Now everyone in the transaction is being served.

My question is: For those of you who've been through this what tips can you give me regarding complete work files, etc.... E&O has been contacted, I'm sure they'll want the work file but what kind of things trip up appraisers in court

Thanks
 

Mike Simpson

Senior Member
Joined
Jan 30, 2002
I haven't been sued yet (knock on wood), but the first person I'd be talking to is your attorney who can best answer your question...just make sure they're working for you!

NOW, DOES ANYONE FEEL LIKE LOWERING THEIR APPRAISAL FEE???

-Mike
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
You did what you needed to do...notify your E & O carrier. If it as you say then I don't think you have any thing to worry about. I would not incur any additional expenses like contacting an attorney at this point. Let your E & O provider handle it. 23+ years and I have not been sued either.
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
They will provide an attorney. No need to send a bunch of money until you know what is going to happen. Often these things get settled long before court. We had Liability Administrators and their attorney put on a four hour seminar for our local appraisers group recently...that was their advice.
 

wyecoyote

Senior Member
Joined
Jan 15, 2002
Professional Status
Gvmt Agency, FNMA, HUD, VA etc.
State
Washington
Typically a E&O carrier will want to look over the appraisal report and the workfile with an attoreny. They will decide from there wether or not your appraisal report is covered under your policy. {If they smell fraud your SOL (not insinuating that you did commit fraud just giving an example)}. Then they give it and the $ amount that the plantif is asking for to a bean counter. The bean counter then figures out wether or not it will cost more to settle or more to fight in court. Even if you are correct on the appraisal report it is up to the E&O carrier on how they want to proceed. So bottom line is if the appraisal is clean as a whistle if the bean counter decides that it will cost more to defend than the possible pay out they will pay.

Ryan
 

jtrotta

Senior Member
Joined
Jan 16, 2002
aks fer the Benjamin$$$$$ now and fer ever, theres no better time than the present to charge accordingly; to the best of my recolection, I've never seen anyone leave court wit Washingtons under their pits :mrgreen: an be happy.

:ph34r:
 

Blue1

Elite Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
California
First of all....good luck. Hope everything turns out well for you. Needless to say, you need an attorney. As others have said, your E&O company should supply you some legal defense....If not find one right away and don't do anything without their consultation. Even though you are innocent, your comments could go against you in court so, advice on what you can say legally will protect you.

If you haven't done so already, write a complete account of the whole assignment from beginning to end with dates of who you talked to, what they said, etc. Go over this with your attorney, it will help you get a better handle on your case. The more familiar you are with the exact course of events, (dates, times, what was said/done, etc.) the more convincing you will be if you have to testify and will keep you from being tripped up.
 

SmilingDog

Member
Joined
Apr 22, 2003
Professional Status
Certified Residential Appraiser
State
California
Blue1's advice is very sound.... get your own attorney. Your E&O insurance (like any other insurance company) may not always look out for YOUR best interest. Get your own legal advice. And I would suggest that you get the BEST real estate attorney you can afford. It's very impressive when you walk in with the "big guns" at your side. Hell they may just drop your name from the suit!
 
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Montana
Bill:

The first step is to read and understand your E & O policy. You must understand your policy and what it says about using your own personal attorney, for instance. Most policies have language regarding the use of a private attorney. Your company will assign you an attorney but you can not count on that attorney knowing about professional liability for appraisers so you may need to bring that attorney up to speed. For instance, when you send the workfile, send an extra copy of the report with pertinent sections of the the limiting conditions, for instance, highlighted. If you mentioned the foundation specifically, highlight that section. From the beginning, don't interfere with the work the attorney has to do but at the same time don't be passive bystander.

I would then maintain a separate file from the report work file for anything related to the suit. Keep contemporaneous records, a log in which you note every conversation you have, the date and time. This may go on for a long time and no one has the memory to record all the events.

The key to your suit is how your state views privity of contracts. Start out with this article

http://www.liability.com/claim_detail.asp?ClaimID=85

and search through Google or equivalent case law on third party liability. Be prepared to furnish this info to your attorney.

Check out your state appraisal law. Some states require immediate notification if you are subject to a suit. Don't get caught not following your license law.

The worse thing is you must pay the deductable for your defense. If your deductible is $1000.00 you must pay this so it is good idea to budget for this. Most think the deductiable applies in the event you lose. The deductiable applies to your defense and everytime you are sued it will cost you.

Lastly, any lawsuit is stressful. Be prepared for this stress and take what ever measures work for you. For most talking about it to a trusted counselor is worth consideration.
 
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