Action against chemical consultants for erroneous lab results relied upon by a client to provide an environmental assessment for a piece of property. The property was purchased based on faulty environmental assessment and was later discovered to require environmental remediation.
Insured is retained to give advice on fire and explosion risks at a factory. After fires occurred at the factory, the plaintiff alleged that it had implemented the Insured’s recommendations. The plaintiff asserted damages arising from the fire.
- The plaintiff asserted actions against the Insured:
- Breach of contract
Insured received a demand letter contending that submission the insured prepared for the claimant to the US EPA regarding fungicide resulted in violation of the Federal Insecticide, Fungicide, and Rodenticide ACT ("FIFRA") and that the EPA imposed "significant" penalties as a result of this violation. The claimant claimed that as a result of the Insureds errors and omissions, it suffered damages in excess $281,512.10, consisting of $88,533 for the EPA fine assessment (reduced from $831,847), legal fees of $116,098.20, Quest's "expenses" of $50,000, additional EPA lab testing required by the EPA of $321, and $26,599.90 for a non-deductible federal tax expense for the fine. Claimants counsel indicated that litigation would be commenced if this amount were not paid. Insureds work involved its client's "repacking" of another entity's, Agrichem's, product and registration with the EPA. Certain aspects of that relationship were not disclosed to the insured and the insured could be exposed for not asking the client, who seems to have "dirty hands" here, more questions. Defense counsel believes that the insured did work properly on the EPA filing repack application for the client in late 2011 based on information he had. By May 2012, however, the insured was aware that the client was formulating a product that already existed and was not a complete repack. Case was settled at mediation for $175,000. However, the settlement check has not been cashed by the claimant, whose counsel claims the insured violated confidentiality provisions in the settlement, after Agrichem demanded funds from the claimant on the same day the claimant received the settlement check. The insured denies the allegation and we are following this issue and will have defense counsel forward the replacement check.