No Good Deed by an Insurer Goes Unpunished: Recommendation of Contractor by Insurer not Employment of Contractor.

• Date: 13 May 2019
• Author: Zalma, Barry

I've been involved in insurance claims for more than 51 years and it is invariable that even when an insurer does everything required of it by a policy of insurance the person insured is seldom totally pleased, the person insured wants more than the policy promises, and will often sue to profit from a property loss.

In Barbara C. Lyon, Individually And As Trustee Of The Donald F. And Barbara C. Lyon Revocable Living Trust V. Service Team Of Professionals (Eastern Carolina), LLC D/B/A 24/Restore And United Services Automobile Association V. Service Team Of Professionals (Eastern Carolina), LLC D/B/A 24/Store, Third Party Plaintiff, v. Coastal Restoration Service, Inc. D/B/A Servpro Of Pitt/Greene & Craven/Pamlico Counties, No. Coal8-627, Court of Appeals of North Carolina (April 16, 2019) Barbara C. Lyon ("plaintiff") was unsatisfied with a claim adjustment, sued, and then appealed from an order granting summary judgment in favor of United Services Automobile Association ("defendant USAA" or "USAA") on all of plaintiff's claims against USAA.

BACKGROUND

The Trust owned a house in Arapahoe that plaintiff and her family used as a second home ("the house"). Plaintiff's husband and their daughter discovered a water leak that caused extensive water damage and mold growth in the house. Ms. Stone contacted USAA, the insurer of the property, to report the leak and resulting damage.

Plaintiff elected to participate in USAA's Property Direct Repair Program ("PDRP") to restore the house. When an insured participates in PDRP, USAA recommends a contractor to assist with repairs. The insured is under no obligation to hire the recommended contractor, and may hire a contractor of their own choosing instead. If the insured selects the recommended contractor, USAA reviews and approves that contractor's estimate, and then mails a check to the contractor as the claims payment. Significantly, this check requires the insured's endorsement to release the...