Recent BC Flood Damage Claim Demonstrates the Importance of Getting Customers in Writing Which Restaurant Services Have Been Authorized for Payment, Whether it’s a Repair or an Investigation complete on the cause of the water leak.
Foodservice company Paul Davis Greater Vancouver recently lost its claim in the C. Civil Rules Tribunal. The company claimed the money was owed for asbestos removal and the investigation of a possible water leak due to a peripheral drainage problem.
In contrast, the clients – Jungho Kim, Jongyi Lee and Saeyun Kim – lost their counterclaim against Paul Davis. The court dismissed their claims that Paul Davis was negligent in repairing the water damage because the company failed to correctly identify the cause of the damage; furthermore, no expert testimony was given to prove that the company’s remediation efforts were not up to standard.
The dispute arose out of a water damage that occurred on April 11, 2019. A week after the damage, Saeyun, a lawyer representing Jungho and Jongyi (the court designated the clients by their first names), signed a work permit and a agreement for Paul Davis to carry out restoration and repairs to the property.
Paul Davis conducted an investigation and asbestos removal work before notifying clients’ insurer, Gore Mutual Insurance Company, that he believed the leak was the result of a perimeter drainage issue. Gore ultimately denied coverage of the loss, noting that the policy wording did not cover direct or indirect water damage caused by “continuous or repeated water infiltration or leakage.”
“Ever since Gore turned down coverage, [Paul Davis] did not perform any repair or restoration work beyond limited water extraction, ”Tribunal Vice-President Shelley Lopez wrote in her decision.
Paul Davis also informed Gore of a second source of suspected loss, namely the failure of the caulking around an upstairs tub. Gore asked Paul Davis to investigate this cause, but the firm did not conduct a full investigation into this possible cause because at that time Jungho had hired a plumber to reapply the caulk around the tub.
Customers claimed Paul Davis was negligent because he failed to identify the tub as the only source of the leak. They said that they had not authorized any of the sanitation work done on the perimeter drainage.
“Saeyun maintains that the authorization [form he signed] doesn’t mention anything about investigating the cause of the loss, which he says is inherently different from the repair task, ”Lopez wrote. “I agree…
“There is nothing in the authorization [form] which mentions an investigation into the cause of the loss, and therefore I find that Saeyun did not authorize such an investigation, which I find included [Paul Davis’] asbestos removal work. While [Paul Davis] may have carried out albeit limited water extraction work, his invoice does not provide any breakdown of this cost and the evidence shows that the invoice mainly concerns survey and clean-up work. “
Elsewhere in the ruling, Lopez suggests that customers in fact implicitly authorized an investigation into the cause of the incident. They just didn’t authorize any payment for it.
For example, in April, Paul Davis received an email from Gore saying that the insurer had “received” the signed non-waiver letter in return. [from the clients]’ and that [Paul Davis] could “proceed to the search for the cause of the loss”, as described in the court decision.
Despite this, the client failed to prove that Paul Davis’ work was negligent. Jungho’s plumber, for example, suggested work be done on the exterior, suggesting he thought caulking might not be the only source of water damage (as Jungho submitted. before the tribunal).
“It is undisputed that the house had asbestos,” Lopez wrote. “Moreover, Saeyun’s observations make it clear that he did not stop [Paul Davis] to cover certain parts of the basement with opaque plastic to solve the asbestos problem….
“Since they allowed it and given the lack of expert evidence on the reasonableness of the investigation, I find that Jungho cannot succeed in his claim that the investigation was not authorized or was conducted unreasonably. “
Featured photo courtesy of iStock.ca/Cunaplus_M.Faba