Mold Contamination - Understanding and averting this very real threat

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Mold Contamination, Part 1 of 2

Understanding and averting this very real threat

By JEFFREY L. ALITZ, Esq.

Donovan Hatem LLP

Boston, Mass.

This is the first in a two-part series concerning mold-contamination legal

issues. Part 2 will address mold-litigation defense strategies.

Regardless of their validity, documented toxic-mold claims continue to

increase. During the last three years, in the United States and Canada, more

than 10,000 mold-based lawsuits have been filed. The targets of those claims

can be broken down as follows: 1,000 claims were brought against sellers of

single-family residences; 2,000 claims were filed against designers and

contractors for alleged design and construction defects; 2,000 claims were

brought by individual condominium-unit owners against condominium

associations for improper maintenance that allegedly resulted in mold

growth; and 5,000 claims were brought by individuals and corporations

against insurance companies for bad faith, that is, delay in paying for

remediation.

The upward trend in this volume of toxic-mold cases can be attributed to

three phenomenon:

1) Building practices and building materials.1

2) A plaintiff population that has been emboldened by huge asbestos and

tobacco verdicts.

3) A standard " serial-litigation " progression, " in which a series of

lawsuits are brought against the same defendant or defendants, in different

courts, by an ever changing array of plaintiffs, involving at each trial the

same or substantially identical claims. " 2

The standard progression of a serial-litigation case is as follows:

A single breakthrough lawsuit based on dubious science results in a

well-publicized verdict.

The news media, through its reporting, supports the theory of causation or

at least gives the theory wide exposure.

More cases are filed and a public perception is created that there is a

problem with the product or practice.

The possibility of lucrative repeat business creates a competitive market

for expert witnesses (who are necessary to support the plaintiff's case in

court).

The defendant corporation struggles to defend or quietly settle the cases or

declares bankruptcy.

As all this is occurring, the publicity attracts the attention of scientific

researchers, who then study the theory or model of causation.

After a period of five to 10 years, published research emerges that

indicates that there really wasn't a defect or flaw in the product after

all, and the litigation quickly begins to dissipate (i.e.,

silicone-breast-implant claims).

Judges become less tolerant of experts who present theories that conflict

with the mainstream research.

Because of the increased costs and reduced likelihood of a " win, "

plaintiffs' lawyers become less inclined to take cases and the claims slowly

fade from the legal landscape. It is clear that at least the first three

stages of serial litigation have been achieved in the realm of toxic mold.

Particularly on point 3, despite the absence of agreed-upon rigid scientific

validity of such claims, the public is a true believer that mold can be

toxic, that someone or something is responsible whenever mold is present in

an indoor environment, and that courts can and should remedy these problems.

Settlements on the Rise

Although an individual who claims that he or she has suffered personal harm

as a result of exposure to mold infestation faces many roadblocks to even

having the case heard in court, let alone prevailing before a jury,

increasingly contractors, design professionals, developers and owners are

settling mold-infestation-based claims that have been brought against them

or are losing such cases when they actually do proceed to a jury finding.

The following are only a sampling of recent decisions:

In August 2001, Santa Clara County (California) settled a 2-year old lawsuit

it had filed over a mold-ridden courthouse against the project construction

design team, including the contractor, architect and the contractor's surety

and over a dozen subcontractors and suppliers. The county recovered $12

million, reflecting, in part, the cost of relocating the courthouse--all

stemming from extensive mold growth that was determined to have arisen from

flaws in the exterior synthetic stucco material.

In June 2001, San Diego State University settled a claim brought against the

contractor of a dormitory for $6.1 million, reflecting the cost to renovate

the mold-damaged structure.

In May 2001, a Delaware jury awarded apartment residents who sued their

apartment-complex owner (claiming that their alleged exposure to mold caused

them to suffer severe asthma and other maladies) $1.04 million in damages

for medical expenses, permanent impairment, and pain and suffering.

In December 2001, participants in a class-action suit against an apartment

developer and owner settled their claims for exposure to mold for $1.8

million.

In 1997, the owners of a house in California filed suit against the seller

of the house, alleging bodily injuries and property damage caused by toxic

mold. The case was settled for $1.35 million.

Lastly, settlement money paid to date arising from litigation concerning the

construction of the Polk County Courthouse in Florida has totaled more than

$50 million to satisfy judgments and settlements concerning personal-injury

claims, costs of evacuation of the courthouse, and for building repairs, all

arising from mold-infestation issues.

References

1) Lstiburek, J. (2001, December, & 2002, January). Moisture, Building

Enclosures, and Mold, Parts I and II. HPAC Engineering.

2) Lynch (1991, Dec. 4). Serial Suits, Focus.

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L. Alitz,is an expert on mold-contamination litigation defense. He

can be reached at jalitz@....