- April 16, 2016
- Posted by: admin
- Category: Trial
Can you sue a Home Inspector in Maryland for a poor inspection? – Home inspector exculpatory clauses
There are courts in other jurisdictions that have invalidated limitation-of-liability or exculpatory clauses in home inspection contracts. See Finch v. Inspectech, LLC, 727 S.E.2d 823 (W.Va. 2012); Glassford v. Brickkicker, 35 A.3d 1044 (Vt. 2011); Pitts v. Watkins, 905 So.2d 553 (Miss. 2005); Lucier v. Williams, 841 A.2d 907 (N.J. Super. Ct. App. Div. 2004). (In Glassford and Pitts, the contracts not only limited liability to the amount of the fee for the inspection, they also required arbitration that necessarily would have cost more than the fee.)Other courts have sustained them. See Gladden v. Boykin, 739 S.E.2d 882 (S.C. 2013); Zerjal v. Daech & Bauer Construction, Inc., 939 N.E.2d 1067, 1072-74 (Ill. App. Ct. 2010).
In Maryland, the General Assembly has implicitly approved of limitation-of-liability clauses in home inspectors’ contracts. Title 16, Subtitle 4A of the Business Occupations and Professions Article pertains to home inspectors. Within the subtitle, § 16-4A-01(c) provides: “Any limitation of the liability of the licensee for any damages resulting from the report on the home inspection shall be agreed to in writing by the parties to the home inspection prior to the performance of the home inspection.”
The General Assembly enacted the provision in 2001 when it enacted the licensing and regulatory scheme for home inspectors. See2001 Laws of Maryland, Chapter 470.
Statutes in derogation of the common law are strictly construed. See Davis v. Slater, 383 Md. 599, 615-16 (2004). Therefore, exculpatory clauses in home inspection contracts likely remain subject to the general common law rule on the enforceability of exculpatory clauses. Exculpatory clauses are enforceable as long as they: (1) do not excuse liability for intentional torts, recklessness, wanton behavior, or gross negligence; (2) are not “the product of grossly unequal bargaining power”; and (3) do not involve a transaction that affects “the public interest.” Wolf v. Ford, 335 Md. 525, 531-32 (1994).
The General Assembly’s implicit approval of limitation-of-liability clauses in home inspection contracts likely means that such clauses would not be invalidated under item (3). The standard of classifying transactions that affect the public interest “is a strict one.” Id. at 532. It “includes the performance of a public service obligation, e.g., public utilities, common carriers, innkeepers, and public warehousemen.” Id. “It also includes those transactions, not readily susceptible to definition or broad categorization, that are so important to the public good that an exculpatory clause would be ‘patently offensive,’ such that ‘”the common sense of the entire community would . . . pronounce it”‘ invalid.” Id. (citations omitted).
So, a limitation-of-liability or exculpatory clause in a home inspection contract could be valid. As you have stated, in Baker v. Roy H. Haas Associates, Inc., 97 Md. App. 371 (1993), the Court of Special Appeals upheld a limitation-of-liability clause in a home inspection contract which limited the inspector’s liability to the amount of the fee that was paid (which in that case was $250.00).
In the present case, however, there is an issue as to whether the clause in question really bars a negligence claim. You stated that the clause provides: “We agree not to hold the inspector and/or Company liable for any deficiency in the property that they mail [sic] fail to discover, or for any consequences of such failure.”
In Adloo v. H.T. Brown Real Estate, Inc., 344 Md. 254 (1996), the Court of Appeals held that, in order for a contractual provision to exculpate a person from liability for his or her negligence, the provision must “clearly, unequivocally, specifically, and unmistakably express” that intention. Id. at 267. It is not necessary for the provision to use the word “negligence” or any other “magic words.” Id.at 266. But it still must clearly and specifically indicate the intent to release the defendant from liability for harm caused by the defendant’s negligence. Id.
Here, the clause does not refer to negligence or harm that results from negligence. Further, as the Adloo Court discussed, exculpatory clauses that purport to absolve a party from liability for “any” harm have been repeatedly found to be insufficient to absolve the party from liability for negligence. The Adloo Court reached the same result. See id. at 258 (quoting the exculpatory clause at issue in the case).
Accordingly, I would argue that the clause at issue here does not release the inspector from liability for negligence. Instead, the clause simply declares that home inspection is not a clairvoyant enterprise and the inspector is not an insurer of the results. But if the inspector was negligent, the clause does not shield the inspector.
Finally, you said that the inspector “screwed up,” without describing the alleged misconduct. If the inspector’s failings amounted to gross negligence or recklessness, then the exculpatory clause, however it is worded, would not be applied. See Wolf v. Ford, supra, 335 Md. at 531 (“a party will not be permitted to excuse its liability for intentional harms or for the more extreme forms of negligence, i.e., reckless, wanton, or gross”); Carleton v. Winter, 901 A.2d 174, 181-82 (D.C. 2006) (exculpatory clause in a home inspection contract will not shield the inspector for misconduct that was grossly negligent or worse).