Informational only. Not legal advice. No attorney-client relationship is created by reading this post. Consult a licensed attorney in your jurisdiction.
The single most common defense invoked by pest control companies in Alabama termite litigation is elegant in its simplicity: the damage was already there when we arrived. Most standard termite bond contracts contain an exclusion for "pre-existing" or "existing" damage—sometimes framed as a carve-out covering only "new" damage detected after the bond's effective date. For plaintiff's counsel, dismantling this defense requires mastery of entomological evidence, contract interpretation principles, and burden-shifting doctrine. This post examines each component in turn.
The Contractual Landscape
Termite service agreements vary considerably in their language, but the most commonly litigated structure looks something like this: the pest control company promises to repair damage caused by a termite infestation that occurs after the initial treatment, and expressly excludes coverage for damage that "existed prior to" or "was present at the time of" the initial inspection or treatment. Some contracts go further, employing language like "new infestations only" or restricting coverage to damage "not shown on the initial inspection report."
The threshold interpretive question is whether "pre-existing damage" means structural damage visible at the time of contracting or also includes active infestations that had not yet produced detectable damage. Courts applying basic contract interpretation principles—and Alabama courts do apply the plain-language rule strictly—will generally look to the words used. See generally Dickinson v. Land Developers Constr. Co., 882 So. 2d 291, 295 (Ala. 2003) (courts interpret termite contracts by their plain terms and will enforce exclusions that are unambiguous). Where the contract excludes only "damage," rather than "infestation," a carrier who discovers and fails to eradicate a pre-existing colony may still bear liability for all structural damage the colony causes after the treatment date—on the theory that the treatment's failure, not the pre-existing infestation, is the proximate cause of the loss.
Burden of Proof: Who Bears It?
The allocation of the burden on the pre-existing-damage carve-out is often determinative. Under general insurance and contract principles, the party asserting an exclusion from coverage bears the burden of proving that the exclusion applies. Alabama courts have been consistent in placing the burden on the insurer—or, by analogy, the service-contract obligor—to demonstrate that the loss falls within the exclusion. See Dickinson, 882 So. 2d at 301–02 (Cook's Pest Control held to scope of contract exclusions it established). Defense counsel routinely attempt to flip this burden, arguing that the plaintiff must affirmatively prove the damage occurred post-bond. Plaintiff's practitioners should resist this framing at every stage. The better-reasoned approach is that once the plaintiff establishes that damage exists during the bond period, the burden shifts to the company to prove the damage predates the bond—a burden that is difficult to satisfy without contemporaneous records.
There is a secondary burden issue: even if some damage predates the bond, the company must isolate and quantify that portion of damage to avoid liability for the entire claim. If the inspection records are incomplete, ambiguous, or internally contradictory—as they frequently are—the "existing damage" exception cannot be segregated cleanly from subsequent damage, and the company's carve-out defense will fail in whole or part.
Expert Entomological Evidence
The heart of any response to the pre-existing damage defense is expert testimony from a forensic entomologist or board-certified pest management professional. Several categories of physical evidence allow experts to opine on the age, extent, and activity status of a termite infestation:
Mud tubes (shelter tubes). Subterranean termites construct distinctive mud tubes of soil, wood particles, and fecal material to traverse non-soil surfaces while maintaining moisture. Alabama Department of Agriculture and Industries administrative regulations require that all visible subterranean termite shelter tubes be removed at the time of the first inspection following initial treatment, and that new tubes discovered at subsequent annual inspections constitute presumptive evidence of active infestation. See Ala. Admin. Code r. 80-10-9-.20(5). An expert can assess whether tubes discovered post-treatment are newly constructed—evidenced by fresh, moist carton material—or are remnants of pre-treatment activity.
Frass (termite droppings/pellets). Though frass is more diagnostic for drywood species (discussed in a separate post), subterranean termite fecal pellets mixed into carton material can assist in dating infestation activity. Fresh frass is moist; aged frass is desiccated and discolored. The quantity and distribution of frass can help an expert distinguish ongoing activity from historical damage.
Exit holes and flight tubes. The presence of exit holes from which winged alates (swarmers) have emerged can establish temporal sequence. Swarming behavior in Alabama subterranean species typically occurs in spring; an expert reviewing the diameter, weathering, and associated debris can estimate when holes were created relative to the bond's inception date.
Wood moisture and decay analysis. Subterranean termite damage is highly correlated with elevated wood moisture content. Alabama Admin. Code r. 80-10-9-.20 requires pest control operators to document moisture levels and wood-to-ground contacts. A forensic analysis comparing moisture readings from annual inspection reports to the structural conditions at the time of litigation can reveal whether the company's inspectors failed to document worsening conditions—conditions that, if documented, would have triggered retreatment obligations.
Dating structural damage. Perhaps most powerful is the expert's ability to date structural damage to a range of years by reference to timber species, the rate of colony growth, and comparative photographs. An entomologist who can testify that a colony of the observed size would require five to seven years to produce the observed damage range—and that the bond predates that range by only two years—effectively rebuts any claim that all damage was pre-existing.
The Alabama Supreme Court recognized in Dickinson that termite consultants can offer competent opinions as to whether pretreatment was adequate (there, Cook's was found to have applied only 444 gallons of Dursban against an expert-recommended 600–700 gallons). 882 So. 2d at 296. That holding reinforces both the relevance and admissibility of expert pest management testimony on treatment adequacy.
Recovering Despite the Carve-Out: Evidence Strategy
Several litigation postures reduce the practical force of the pre-existing-damage defense:
Attack the initial inspection record. The pest control company's initial inspection report is simultaneously its most important piece of evidence and its greatest liability. Alabama regulations require an "Official Alabama Wood Infestation Inspection Report" identifying all visible evidence of active or previous infestation. See Ala. Admin. Code r. 80-10-9 (structural pest control regulations); Morris v. Laster, No. 1990386, 2001 WL 43438, at \*1 (Ala. Jan. 12, 2001) (describing Alabama Wood Infestation Inspection Report requirements). If the initial report is blank or reflects "no evidence of infestation" and the company later claims damage was pre-existing, you have direct evidence of either fraud or negligent inspection—both of which support independent claims.
Invoke the annual inspection duty. Ala. Code § 2-28-9 (1975) requires all persons engaged in subterranean termite eradication and control to make annual inspections and to report to the building owner whether there has been a reinfestation. Dickinson, 882 So. 2d at 303. A company that performed annual inspections, found nothing, and then claims damage was pre-existing has a credibility problem it cannot easily escape.
Focus on the retreatment obligation. Many bond contracts obligate the company to retreat upon discovery of new termite activity—regardless of whether the activity began before or after the bond inception. If the company discovered conditions consistent with active infestation at any annual inspection and failed to retreat, that failure is a breach independent of the pre-existing-damage carve-out.
Use spoliation doctrine. If the company demolished or repaired damaged areas without adequate documentation—a common occurrence when the company is also the repair contractor—argue for a spoliation inference at trial. Defendant companies in the dual role of inspector/repairer have a heightened preservation obligation given the obvious evidentiary significance of the damaged material.
Open Questions
Several issues remain contested in Alabama termite litigation. First, the courts have not definitively resolved whether fraud claims survive a contractual pre-existing damage carve-out—i.e., whether a company that knew damage existed, issued a bond anyway, and then invoked the carve-out can be held liable in fraud regardless of the contract's terms. The better argument is yes, consistent with Morris v. Laster (jury verdict of $400,000 in punitive damages against a home seller who concealed termite damage). Second, the interaction between the pre-existing-damage carve-out and the discovery rule for latent damage—particularly where the company's own inspections failed to flag worsening conditions—remains a productive area of argument. As noted in Dickinson, courts will not allow a limitations period to run in favor of a party whose incomplete disclosures prevented the homeowner from discovering the extent of damage. Third, where the initial inspection report is itself the product of fraud or negligence, courts should be receptive to arguments that the company is estopped from asserting the pre-existing carve-out at all.
Closing
The "new or existing" carve-out is a formidable defense on paper and a manageable one at trial. The key is building an evidentiary record before the defense has an opportunity to remediate and repair. Preserve physical evidence, secure an experienced entomologist early, and challenge the adequacy of the initial and annual inspections. A defense that depends on damage being pre-existing cannot survive scrutiny when the company's own inspection records fail to document it.
Talk to Yates Anderson
If you are litigating a matter in this area — or weighing whether to — the working analysis above only goes so far. Request a case evaluation and a Yates Anderson attorney will respond within one business day.
Informational only. Not legal advice. No attorney-client relationship is created by reading this post. Consult a licensed attorney in your jurisdiction.