Lawsuits on the rise

[Guest guest]

August 11, 2005

Lawsuits, claims over mold damage on rise

By Genaro C. Armas

The 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 on Thursday 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.

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.

In Santa Cruz, hundreds of county workers were forced from their Emeline

Avenue office building in August 2001 after a variety of mold linked to

long-term respiratory infections was found.

County officials sued E.A. Hathaway, the Santa Clara contracting company

responsible for the building's $10 million construction in 1995, for relocation

and renovation costs.

In 2002, the same black mold was discovered in several Capitola City

offices. No health complaints were filed at the time. 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.

But 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 is currently conducting a study on 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.

A spokeswoman for the American Bar Association declined comment, while a

call seeking comment from the American Trial Lawyers Association was not

immediately returned.

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.

Anita Drummond, director of legal and regulatory affairs for Associated

Builders and Contractors, says some claims of property damage due to mold may

be

legitimate because some builders are using cheaper materials that tend to

hold more moisture to build homes.

But, she added, more builders and contractors are putting unnecessary

resources to avoiding future mold damage because of the threat of a lawsuit.

The

task is made more difficult because there are no common standards for what is

an acceptable level of mold in a home, she said.

The EPA says 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.

July 18, 2003