Is the email "email@example.com" managed by the same server as the web site? If not, that could be the issue. Since the domain matches the web site domain it may be checking the email server on that domain to verify it is a valid email address and not finding it? You may be able to talk to the hosting provider to see if there is a solution. I doubt the problem is in the php code, it is much more likely that the server and local smtp server aren't allowing emails to get through.
It might be as easy as registering the email address with the email server on the same hosted server as the web site.