Linder v. Insurance Claims Consultants, Inc.

560 S.E.2d 612 (2002)

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Nature of the Case

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Facts

Insurance adjusting is the business of settling an insurance claim. The adjuster documents and measures damages gathers relevant facts, determines repair or replacement costs, and submits the claim to the insurance company. The adjuster then negotiates with the insurance company, or the insurance company's adjuster, to obtain the best settlement for the insured. Third-party adjusting involves the situation where a 'stranger to the insurance contract' asserts a claim against an insured tortfeasor. An adjuster represents an injured client in making a claim under a liability insurance contract against an insurance company that insures or indemnifies a third person who is or may be liable for the injury caused to the adjuster's client. A first-party adjuster is generally considered to be synonymous with the term 'public adjuster.' A new South Carolina statute regulates public insurance adjusting. South Carolina restricts public adjusting to first-party claims involving only real or personal property. Ps suffered property loss due to a fire at their home. One of the repairmen recommended D. In the first meeting D advised P that their gun collection should be covered under their policy. Because of this Ps were successful in obtaining payment for the guns. P entered into a contract with D and agreed to pay 10% of the total amount adjusted or otherwise recovered. P executed a 'Notice' to their insurance company which indicated that D had been hired for the preparation of their claim and that D should be contacted for 'any further information and negotiations' concerning their claim. P released the lawyer they had retained a couple of weeks before contacting D. D spent over 300 man hours preparing the detailed inventory of the damaged household contents. D was able to obtain an almost $12,000 increase in what the insurance company originally agreed to cover. The insurance company delayed payment and suggested that P get an attorney. When the attorney settled the claim, P executed a release of all claims. P did not pay the 10% fee. D sued P for breach of contract. Ps countersued D for unauthorized practice of law, and therefore the contract between them is void ab initio. P then sought declaratory relief that D was engaged in the unauthorized practice of law.