A moldy, costly mess

[Guest guest]

A moldy, costly mess

Pierce County Housing Authority settles one tenants' lawsuit, fights

another

TheNewsTribune.com - Tacoma,WA*

SEAN ROBINSON;

sean.robinson@...

http://www.thenewstribune.com/front/topstories/story/266076.html

Published: January 27th, 2008 Two months ago, the Pierce County

Housing Authority paid almost $2 million for the right to say it did

nothing wrong. Soon, the agency might have to buy the same right all

over again.

The $1.95 million was the overall cost of a settlement – the endgame

of a lawsuit over Eagle's Watch, a mold-riddled, 193-unit apartment

complex on Puyallup's South Hill, owned and operated by the agency

since 1992.

On Jan. 18, the agency got sued again for the same problems at the

same place. So far, the latest suit names only one resident, but

more could follow, according to Darrell Cochran, the Tacoma attorney

representing tenants in both actions.

In the earlier case, filed in 2006, 25 low-income tenants, including

seven children, claimed the mold sickened them. They contended that

Housing Authority managers blamed residents for the problem, charged

extra fees for half-hearted efforts to clean it up, and threatened

to evict tenants who complained too much.

It took 18 months of bruising litigation to reach the settlement.

The tenants and their lawyers split $750,000. The Housing Authority

spent another $1.2 million on attorney fees.

There was no verdict, no finding of fault. The agreed settlement

stipulated that the Housing Authority denied wrongdoing. The tenants

signed papers accepting payment and agreed not to sue the agency

again for the same problems. The uninsured payout sucked up 7.6

percent of the agency's $25.5 million budget for 2007.

Had the case gone to trial, the Housing Authority would have faced a

difficult test. Mold problems at Eagle's Watch stretched back 15

years, and the agency knew it.

" Yes, of course, we knew that mold was there, obviously, "

Leech, chairman of the Housing Authority's six-member board of

directors, told The News Tribune this month. He said he first

learned of the mold in 2005, when an ex-agency employee launched a

one-woman demonstration in downtown Tacoma, handing out fliers that

included pictures of moldy apartment units.

So why not just fix the problem?

Agency leaders say they've tried and they're still trying.

They say they want to do right by the tenants. They say they're

spending big money on renovations to Eagle's Watch, and retraining

employees in customer service. They say they're still recovering

from difficulties that have plagued the Housing Authority over the

years and hindered efforts to combat the mold.

" Would I love to have had the money expended in the lawsuit go into

that property? Absolutely, " said Charlie Gray, the Housing

Authority's deputy director. " But we're back in, doing the work that

was intended. "

`BLAME THE TENANT'

Eagle's Watch is not public housing – anyone can rent an apartment

there. Some tenants, but not all, receive public assistance for

their housing costs. The News Tribune tried to interview current and

former tenants of Eagle's Watch who were involved in the first

lawsuit. Some could not be reached. Others didn't want to talk.

They cited the settlement, which includes a confidentiality clause

and a promise not to reveal the terms.

Anyone can read them – the settlement is a public record, and the

court file, also open to the public, lists the payments tenants

received, which ranged from $7,000 to $15,000 apiece.

The file also recounts their complaints.

" During my tenancy at Eagle's Watch, I have tried many, many times

to clean the mold that has invaded our unit, " declared Fawn Bergh,

who moved into the complex in 2005. " I have cleaned so many times

that the paint has come off some of the walls. I have also kept my

apartment well ventilated and I have cleaned the apartment

regularly. No matter what I do, the mold returns. "

The file reveals that Eagle's Watch has been a headache for the

Housing Authority since the day it bought the 17-building complex

perched near the crest of Meridian Street South.

A 1992 property appraisal the agency conducted said the complex,

built by a Seattle developer in 1986, was old before its time.

" The first floor units suffer from extensive molding in both the

floor covering and the walls, " the appraisal read. " The cause of

this problem is unknown, but could be the result of improper

building drainage or the lack of a vapor barrier under the slab

floors. "

The Housing Authority hired a contractor to tackle the problem, the

court file shows. The work wasn't completed. The agency sued the

contractor in 1994, recovering some of its money, but leaving the

anti-mold measures unfinished.

The agency tried to sell the complex in 1995. An appraisal conducted

at that time suggests the drainage problems were fixed, but other

records say they weren't. The prospective buyer balked, relying in

part on a report from the former maintenance manager of Eagle's

Watch, who cited the continuing mold problem.

The mold was still there in 2004, when the Housing Authority paid

for inspections and appraisals to determine what it would take to

dry out the complex.

By that time, Eagle's Watch residents and managers had slipped into

a depressing routine described over and over in court records: After

a mold complaint, maintenance workers would stop by with cans of

primer and paint over the walls. Within weeks, the mold would

return. If residents complained again, the reception was cooler.

" Blame the tenant, take no company responsibility and threaten to

charge if that is what it would take to get the tenant to basically

shut up, " said Lori Hill, a former assistant manager at the complex.

She said the directive came from other managers.

The allegation is not specifically denied in court documents. One

manager, Bobbie , said in a deposition that she had not heard

any staff members complain about the way mold problems were handled.

Hill filed a separate declaration in response, saying she had

complained to and other supervisors.

Hill recalled seeing mushrooms growing in the carpets of first-floor

units. When windows had to be replaced, she said she could push her

fingers through the rotting wood of the surrounding frames.

Donna , who worked for the Housing Authority cleaning

apartments, said in a deposition that 90 percent of the units she

cleaned at Eagle's Watch had mold problems.

Tenants in the lawsuit testified that they were often told the mold

was their fault – they weren't keeping the apartments clean enough.

Their furniture was too close to the walls. They said they were

charged extra fees for mold cleanup costs.

Hill and April Henderlong, another ex-manager, also testified to the

blame-the-tenants practice, though other managers denied it. The

News Tribune interviewed Henderlong in early January.

" Eagle's Watch was really ripping people up when they moved out, "

said Henderlong, who was fired by the Housing Authority in

2005. " Damages that were there when people moved in, they were

charging them when they moved out. "

She poured her frustration into fliers. They included photos of

moldy apartment walls, and an open letter to Pierce County Executive

Ladenburg. In 2005, she stood in front of the County-City

Building in Tacoma, handing out the fliers to anyone who asked.

She said she was fired shortly after that demonstration. Agency

leaders say Henderlong was a temporary employee who declined a

permanent position. Henderlong thinks it was a case of retaliation,

though she has not sought legal redress. She now lives in Indiana.

Ladenburg appoints Housing Authority board members, but doesn't have

direct oversight of the agency. There is no indication in court

records that he saw or responded to Henderlong's complaints.

During a deposition in the lawsuit, Henderlong stated that she

couldn't make any headway with her superiors at the Housing

Authority, so she took her concerns to a higher level. Ladenburg

seemed like a logical choice.

" I believed that he was the boss of the boss of the boss of the

boss, " she said.

Hull, the Housing Authority's executive director, said she

didn't hear about Henderlong's complaints at the time.

" April never reported anything to our executive offices, " Hull

said. " If we had received a report, we would have investigated the

circumstances and made appropriate decisions based upon the results

of the investigation. "

LOSING THE DISCLOSURE BATTLE

The lawsuit, filed in June 2006, wasn't settled until November of

last year. It generated 385 legal filings sprawled across 6,470

pages. Attorneys for Garvey Schubert Barer, the Seattle firm that

represented the Housing Authority, rang up more than $1 million in

legal fees – almost three times the amount Cochran, the tenants'

attorney, collected from the settlement.

The two sides didn't get along. Battles over admissible evidence got

testy. Both sides traded accusations of misconduct. They fought

about the proper conduct of apartment inspections. They fought about

deadlines. They fought about who was missing more of them.

They fought over how to search the Housing Authority

computers: " Mold " was an acceptable search term. " Sued " was not.

The Housing Authority's defense began to crumble in April 2007,

after 10 months of litigation. Old evidence resurfaced from the 1994

lawsuit over unfinished work at Eagle's Watch. Cochran and his legal

team jumped all over it, demanding hundreds of pages of records

related to the case.

Housing Authority attorneys resisted – they said the request was

unreasonable. They provided some documents but not all at first. The

rest were protected by attorney-client privilege, they argued.

The standoff lasted four months. The agency lost the disclosure

battle in early August 2007, and agreed to settle a week later.

Hull said the Housing Authority's attorneys guided the don't-give-in

legal strategy. Agency leaders felt they had to fight, she said –

otherwise, the payout might have been greater. They tried twice to

settle the case, she said. The first offer was $250,000. The second

was $500,000.

Cochran and the tenants weren't interested. They had originally

asked for $4 million in damages.

" They seemed to believe we had insurance that we didn't have, " said

Gray, the authority's deputy director. (Cochran doesn't agree – an

esoteric debate over the agency's insurance was an unresolved side

argument in the lawsuit.)

Board chairman Leech said he and other board members received

monthly updates on the litigation. He said he supported a

settlement, if possible. As the case dragged on, he worried about

the legal bills.

At the time, Leech didn't know about the 1994 lawsuit regarding

unfinished work at Eagle's Watch. In a Jan. 17 interview, he said he

learned of the case only recently, after inquiries by The News

Tribune.

Would anything have changed, had he known sooner? He is unsure. He

thinks he would have looked at the situation differently. He is

disappointed.

" I'm kind of caught between my beliefs, " said Leech. " These folks

who have come forth and filed have had their day in court. I feel

good about that.

" I don't feel good about the money. "

`A CRISIS IN OUR COMMUNITY'

Hull and Gray said they have taken steps to improve customer service

at Eagle's Watch and other agency properties. Tenants who complain

about mold won't face retaliation, they said.

" It's my expectation that we are responsive, that we take to heart

any complaints, " Gray said. " I don't want to blame the residents,

who I'm happy to serve. "

Repairs are under way, too. One of the buildings recently got a face-

lift – new siding, new windows and improvements to the flooring

designed to keep moisture out.

Nearby, building M is getting the same treatment, at an estimated

cost of $256,000. When The News Tribune visited the site in mid-

January, workers pounded, sawed and climbed all over the building,

cutting siding panels and caulking windows. Gray said all 17

buildings in the complex are slated for the same repairs.

Until 2004, the agency lacked the ready money to perform such work,

Gray and Hull said. That changed after the agency sold several

apartment complexes that were draining revenue, allowing more cash

for large-scale improvements.

Gray joined the Housing Authority in late 2006, after the Eagle's

Watch lawsuit was filed. He knows the agency has had a hard time,

but he sees cause for hope, and signs of improvement.

" I know it sounds corny, but I get up every day because I recognize

the need for affordable housing, " he said. " I recognize that it's a

crisis in our community. "

Leech also wants better performance from the agency. A civil rights

veteran, he has worked for the City of Tacoma for 21 years. He's the

compliance manager of the city's Human Rights and Human Services

Department, and he's about to retire – but not from the Housing

Authority.

" We are going to make those improvements. We're going to do the

things that should be done, " Leech said. " I have to believe that

good is going to come out of this if we work hard. We want to try to

do what's right. "

The Pierce County Housing Authority is a public landlord that

provides affordable housing to low-income residents. The agency owns

1,123 apartment units in 13 complexes throughout the county, along

with 134 homes.

Some tenants, but not all, receive public assistance to pay for

their housing costs. The Housing Authority doesn't levy taxes. Most

of its money flows from two sources: government grants (about $17

million in 2007) and rent ($7.5 million).

A six-member board of commissioners oversees the agency, and hires

its executive director. The Pierce County executive appoints five

commissioners, and those five appoint a sixth. Commissioners serve

five-year terms. They do not receive a salary.

Additional information about the agency is available online at

www.pchawa.org. 10 things you should know about mold

• Molds can be found almost anywhere and can grow on virtually any

substance, providing moisture is present. There are molds that can

grow on wood, paper, carpet and foods.

• Potential health effects and symptoms associated with exposure to

mold include allergic reactions, asthma and other respiratory

complaints.

• There is no practical way to eliminate all mold and mold spores

indoors; the way to control indoor mold growth is to control

moisture.

• If mold is a problem, you must clean up the mold and eliminate

sources of moisture.

• Fix the source of the water problem or leak to prevent mold

growth.

• Reduce indoor humidity (to 30 to 60 percent) to decrease mold

growth by venting bathrooms, dryers and other moisture-generating

sources to the outside; using air conditioners and dehumidifiers;

increasing ventilation and using exhaust fans whenever cooking,

washing dishes or cleaning.

• Clean and dry any damp or wet building materials and furnishings

within 24 to 48 hours to prevent mold growth.

• Clean mold off hard surfaces with water and detergent, and dry

completely. Absorbent materials that are moldy, such as ceiling

tiles, might need to be replaced.

• Prevent condensation: Add insulation to reduce the potential for

condensation on cold surfaces such as windows, piping, exterior

walls, roof and floors.

• Don't install carpeting in areas where there's a perpetual

moisture problem, such as near drinking fountains, classroom sinks

or on concrete floors with leaks or frequent condensation.