Lawsuits, Claims Over Mold On Rise

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August 17, 2005 Lawsuits, Claims Over Mold On Rise Volume 1

Issue 171

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Lawsuits, Claims Over Mold On Rise

by Genaro C. Armas, Associated Press

WASHINGTON -- It's usually just scrubbed off tile grout, shower

stalls and basement walls, but lately mold has become the subject of

expensive insurance claims and multimillion dollar lawsuits.

Builders, insurance industry groups and other businesses yesterday

blamed overzealous lawyers and increased media attention for a

threefold increase in mold-related lawsuits the past three years.

There are 10,000 such cases pending today nationwide, the Insurance

Information Institute says.

(Among the cases is a suit filed by Hilton against the designers and

builders of Hilton Hawaiian Village's Kalia Tower. Hilton opened the

tower in May 2001, then shuttered all 453 guest rooms in July 2002

because of uncontrollable mold growth. Hilton has estimated that

eradicating the mold will cost $56 million. The tower is expected to

reopen later this year.)

The tiny fungi can trigger allergic reactions similar to hay fever,

according to the Environmental Protection Agency. The Centers for

Disease Control and Prevention has said that some agriculture

workers with chronic exposure to mold can experience respiratory

illnesses.

But many of the lawsuits contend that mold damage inside a home or

building that wasn't cleaned up properly caused more serious health

problems like bleeding in the lungs or brain damage.

There isn't enough scientific evidence to support those claims,

Hardin, of the toxicology consulting firm GlobalTox, said at a

forum on mold cases at the U.S. Chamber of Commerce.

The CDC and the National Academies of Science are both currently

studying mold's effects on human health.

" Lawsuits over fungi fail to meet the test of sound science, " said

Rickard, president of the chamber's Institute for Legal Reform.

Lang, a Chicago lawyer who has handled mold cases, said

numerous other studies have pointed to a possible link between molds

and more serious illnesses. The so-called mycotoxins found in some

mold can also be found in weapons used in chemical warfare, he said.

Lawsuits have increased recently because more homeowners and lawyers

are only now becoming familiar with the complicated health,

insurance and legal issues involved, he added.

" There's people out there that are really sick. Trial lawyers aren't

making that up. " said Lang, who is co-chair of a toxic mold

litigation group for the American Trial Lawyers Association.

According to the CDC's Web site, molds are found virtually

everywhere, both indoors and outdoors, year round. Growth is

encouraged by warm and humid conditions.

Mold claims tend to be more common across the warmer climates in the

South, and have especially increased in Texas. In 2001, a jury there

ruled that Farmers Insurance Group had to pay a family $32 million

for damages related to a mold-infested home.

An appeals court last year reduced it to $4 million for actual

damages to the home, but threw out the part of the award for mental

anguish and punitive damages.

Insurance officials say the attention drawn by the case has led to

the filing of similar lawsuits nationwide.

In some states, mold-related damages are now putting caps on claims

or have excluded mold coverage from the policy. The high jury awards

have also led to an increase in premiums, insurers say.

Changes in building codes in the 1970s to make homes more energy

efficient and airtight had the effect of allowing less ventilation

through a house that would dry out a wet wall or floor, which in

turn may have led to more mold damage claims, said Mc,

an Overland Park, Kan., attorney who has defended a landlord and an

architect in mold lawsuits.

In recent years, more contracts with heating and cooling engineers

have included disclaimers releasing them from responsibility for

mold-related damage, especially on larger-scale projects, Mc

said.

The EPA recommends that any mold damage on hard surfaces should be

cleaned up immediately with detergent and water.

Absorbent materials such as ceiling tiles or carpet that become

moldy may have to be replaced.

" Prevention and control is the key, " said EPA spokeswoman

Milbourn.

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