Guest View: CEO says company was helping, not scamming, fire victims
Editor’s note: The following is a response to an article published Jan. 17 in the Tribune, “Company will pay fine over Angora fire insurance scam.”
Recently, the Tahoe Daily Tribune published an Associated Press article about an agreement reached between the state Department of Insurance (DOI) and Paramount Disaster Recovery, Inc. We were not given the opportunity to add our statements to the article.
The DOI alleged that Paramount was acting in a capacity for which a public insurance adjuster’s license was required in South Lake Tahoe after the Angora fire in 2007. Paramount maintained that it was acting within the purview of its license as a general contractor when it prepared a detailed analysis of fire and smoke damage for its clients and never acted as a public adjuster.
The DOI took action against Paramount and certain of its representatives based almost entirely on a complaint made by an insurance-company adjuster whom Paramount had exposed for attempting to underestimate two claims. Paramount demonstrated to its clients that the adjuster was paying less than what Paramount believed was required to fully restore each residence.
If Paramount discovers damage to a structure, then it is contractually bound to disclose such information to the client. The adjuster, on the other hand, is under no such duty. While the obvious damage was acknowledged, the latent and equally dangerous and unhealthy smoke damage was being ignored. Paramount, keeping the interest of its clients as the dominant factor, protested that the insurance-company adjuster, unlicensed as a contractor, was attempting to foist an unreasonably low estimate on the clients. Paramount insisted that its clients acquire all the information necessary to decide how best to restore their homes after comparing Paramount’s estimate with any others.
Paramount and its representatives denied that they were acting as a public adjuster and have questioned the constitutionality of the department’s enforcement of one statute under the California Insurance Code, which regulates the insurance industry when the same acts are authorized by the California Business & Professions Code, which regulates general contractors such as Paramount.
Paramount filed suit challenging the authority of the DOI to regulate the actions of a general contractor. In that action, declarations were filed from every consumer with whom Paramount had contact after the Angora fire attesting to the fact that Paramount at all times represented itself or performed work as a general contractor, and that the documents that were signed clearly stated that Paramount was a general contractor. In fact, although the DOI touts itself as “the largest consumer-protection agency in the state,” not one consumer in South Lake Tahoe filed a complaint with the department about Paramount’s activities.
Paramount agreed to settle the matters it had with the DOI specifically premised on there being no admission of guilt or liability purely as a business decision in order to run the company without legal matters getting in the way. Paramount was confident it would have prevailed in the litigation, but it would have cost the business more in the long run. Simply stated, there is no competent evidence and no legal judgment that Paramount or its representatives committed any illegal act. For Paramount, the focus will continue to be on helping the property owner prepare for a disaster or recover from one.
– Steve Slepcevic is the CEO of Paramount Disaster Recovery, Inc.