A Legal Look at Toxic Mold

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(despite the offensive title, he does a passable job with the history)

http://kandrlaw.com/Articles/a20.htm

THERE'S GOLD IN THAT MOLD:

SICK BUILDING SYNDROME IN THE CONSTRUCTION DEFECT CASE

by on, IV, Esq.

A little known, but rapidly growing area in construction defect litigation

involves fungal contamination caused by chronic water intrusion into the

building envelope of homes and office buildings arising from defective

design and construction. Recent research and a series of high profile

lawsuits across the country have focused both the medical and the legal

community on the alarming rate of toxic fungal species present in structures

that are affected by water damage or moisture intrusion problems. This

article is intended as an introduction to these claims as well as to provide

a brief explanation of the scientific, medical and legal issues that are

involved when handling these type of cases.

The Environmental Protection Agency (EPA), has called Indoor Air Quality

(IAQ) the number one environmental health concern of the 1990's. Symptoms

resulting from poor IAQ range from nuisance level odor complaints to serious

diseases attributable to exposures to microbiological, chemical, and

hydrocarbon contamination in the building. There are generally two types of

health risks found in the literature associated with poor IAQ; Sick Building

Syndrom (SBS) and Building Related Illness (BRI).

Sick Building Syndrome (SBS)

Sick Building Syndrome (SBS) is a relatively recent phenomenon. The energy

crisis in the 1970's generated stricter building codes which called for

reduced ventilation rates, increased insulation and " tighter " buildings.

SBS, as it is known, is a conglomeration of non-specific symptoms

experienced by building occupants who work in a building which has been

" tightened " to make it more energy efficient. The syndrome includes

symptoms such as burning eyes, nose, and throat, sinusitis, dry skin,

nausea, headaches, fatigue and mental confusion. Published reports estimate

that employees who work in a sick building lose approximately six (6) days

per year in absenteeism compared to workers in a healthy building. The

EPA's own headquarters building in Washington, D.C. has been the target of

both media reports and litigation filed by employees who claimed Multiple

Chemical Sensitivity (MCS) from building renovations.. Although the initial

recovery of $1 Million was modest, an important precedent was set with

respect to these kind of non-specific illnesses and the cost of defense was

significant.

Building Related Illness (BRI)

Building Related Illness (BRI) is the most serious result of poor IAQ.

BRI's are clinically diagnosable diseases that include asbestosis,

Legionnaire's Disease, Pontiac Fever, humidifier fever, and chemical

allergies. Some experts feel that a person can suffer simultaneously from

both SBS and BRI.

Microbiological Contamination

Microbiological contamination, whether fungal or bacterial, usually results

from chronic water infiltration into the building envelope due to leaky

roofs, windows, balconies, broken pipes, flooding, sewage backup, or " short

cycling " of air conditioners that do not remove enough humidity from the air

during the cooling process. Fungal contamination occurs where moisture

penetrates a favorable growth medium, such drywall, carpets, ceiling tiles,

books and plywood, wood studs and wood furniture. The health risks from

exposure to this type of contamination can include life-threatening

respiratory infections, allergies, asthma, nervous and immune system damage,

hypersensitivity diseases, and others. This article focuses on fungal

contamination as it is the most common type of health risk arising from

defective construction.

Fungal Contamination

Not all molds or fungi are " bad " , but recently there have been a number of

reports in the medical community linking toxic and allergenic fungi such as

Stachybotrys atra with illnesses in hospitals, courthouses and homes across

the county. Fungal species have been involved in human suffering since the

beginning of time. The earliest published report of illness caused by

fungal exposure can be found in the Book of Leviticus.

1. Biology of Fungi

Fungi in indoor environments are comprised of microscopic yeasts and molds,

called micro fungi, as opposed to plaster and wood-rotting fungi which are

called macro fungi. The naturally occurring products produced by fungi that

cause a toxic effect are called mycotoxins. Mycotoxins are the secondary

chemical metabolite of the fungi and are usually contained in spores.

Toxicity can arise from exposure to mycotoxin-containing spores in the air

or through contact with the skin. The following is a brief discussion of

three fungi that have been documented by the medical community as causing

ill health effects in residential, public and commercial buildings.

2. Stachybotrys atra

Stachybotrys atra (also known as S. Chartarum) is a greenish-black fungus

found worldwide in soil and plant debris that colonizes particularly well in

high cellulose, water-saturated material, such as paper, wallpaper, paper

backing on drywall, ceiling tiles, carpets (especially with jute backing),

insulation material (especially cellulose-based insulation), wood studs and

even general construction debris. Moisture contents in excess of 70% and

temperature ranges between 2-40 C are said to be ideal environments.

Toxicity increases in paper with a water content in excess of 97.0%.

Mycotoxins and other biologically active compounds produced by S. chartarum

are the reason why this fungus is of concern to human health. Mycotoxin

poisoning by this fungus is referred to as " stachybotryotoxicosis. "

Illnesses reported after intense exposures to mycotoxins of Stachybotrys

atra or its metabolites included the following:

1. immunotoxic (higher incidence of infection)

2. dermotoxic (dermatitis, skin rash)

3. neurotoxic (toxic encephalopathy: headache, memory and verbal problems,

fatigue, malaise, vertigo, dizziness, depression)

4. enterotoxic (nausea, vomiting, diarrhea, gallbladder-like-colic pain)

5. vascular (fragile blood vessels and bleeding, nose bleeds, hemorrhagic

lung disease (especially in male infants)

6. respiratory (burning-sore throat (laryngitis), irritant cough, exertional

shortness of breadth, chest tightness, wheezing (bronchitis and pneumonitis)

and respiratory tract ciliary damage (clearing of airways imparied),

bleeding from the lungs (hemoptysis)

" Stachy " has been blamed on an alarming number of medical and legal cases

causing serious illness, and even deaths, across the country. In 1993-1994,

a cluster of pulmonary hemorrhages in infants in Cleveland, Ohio was traced

to exposure to this fungus found in basements of the infant's homes. In the

last five years, 15 infants in Northeast Ohio have died and 26 have become

seriously ill from pulmonary hemosiderosis, which Dr. Dorr Dearborn of

Rainbow Babies & Children's Hospital blames on exposure to the fungus. Dr.

Dearborn is widely recognized as the leading medical expert on pediatric

cases involving Stachybotrys. Both the EPA and the Cleveland Dept. of

Health speculate that this fungus is the cause of those illnesses and

deaths.

Adult symptoms include immune suppression, bleeding, bleeding and adverse

reproduction, and damage to the central nervous system, skin, eyes, upper

and lower respiratory tracts, and chronic fatigue.

Contamination from this fungus has been blamed on temporary and permanent

closing of a public elementary schools in Fargo, N. Dakota (1997), the Polk

County courthouse in Florida (1992), the County Courthouse in

Florida, the G.W. Battles Elementary School in Santa , Ca. (1999) and

the New Museum of Contemporary Art in New York. In May of 1997, the Journal

of the American Medical Association carried a news article entitled, " Floods

carry potential for toxic mold disease " (Marwick, 1997). Additional

newspaper articles on health risks posed by this fungus have appeared in

Cleveland's The Plain Dealer (M. Sangiacomo 8/8/98;1/17/97; 2/14/96;

2/21/96; 2/12/95; 5/11/93; 1/13/95), the New York Times (5/5/96), and the

Fargo Forum (6/97). In addition, literally dozens of articles have appeared

in the last few years in medical and scientific journals documenting this

problem (See, Selected References).

Detection of this fungus is usually done by visual inspection. Because

this fungus in not readily airborne, air sampling in a contaminated indoor

environment may show low levels of spores in air and give " false negative "

results. As a result, air sampling should be relied upon only to assess

the extent of contamination throughout the building once it's presence has

been visually confirmed.

3. Penicillium (P. citrinum, P. expansum, P. Viridicatum, P. culopium)

Some Penicillium species are common indoor fungi, even in clean

environments. Species are commonly found in air samples, carpet and

wallpaper. P. species can be found at sub-basement level rooms, in

libraries, auditoriums, storage room of paper materials and also in

ventilation systems. As with most fungi, the spores have the highest

concentrations of mycotoxin. Exposure to the various Penicillium toxin can

result in the following illnesses:

1. Patulin, a toxin from P. expansum: cytotoxic and/or carcinogenic;

2. Citrinin, a toxin from P. citrinum, P. expansum & P. viridicatum:

neoprotoxic;

3. Ochratoxin, a toxin from P. cyclopium & P. viridicatum: neurophortoxic

This fungus may cause hypersensitivity pneumonitis, allergic alveolitis in

susceptible persons. It is reported to be allergenic and can cause

extrinsic asthma. Acute symptoms include edema and bronciospasms, while

chronic cases may develop pulmonary emphysema.

4. Aspergillus

This fungi contains over 100 species, of which approximately 15 are commonly

found in dwellings. Most commonly found species are toxigenic or

allergenic. Aflatoxins are the most extensively studied mycotoxin. These

are more toxic than many industrial cancer causing substances, are acutely

toxic to the liver, brain, kidneys and heart. Chronic exposure can cause

potent carcinogens of the liver. Ochratoxins can damage the kidney and

cause renal failure leading possibly to death.

Remediation of Stachybotrys

Guidelines to access and remediate indoor fungal contamination have been

established by an expert panel convened by the New York City Health Dept.

(NYCDOH) and the Mount Sinai Medical Center, Dept. of Occupational and

Environmental Medicine, N.Y. and recently the American Industrial Hygiene

Association (AIHA).

Experts usually recommend that small-scale contamination of one square foot

or less can be cleaned by the homeowner or building manager. The fungus

must first be killed using a diluted chlorine solution (one cup of chlorine

per gallon of water treated for at least 15 minutes) before the contaminated

material is removed and discarded. Disinfecting the surface of

contaminated material may kill the fungus on the surface, but mycelium

within the substrate will often survive and grow again. Also, mycotoxins may

accumulate in contaminated material. Removing the contaminated material is

usually the best option. Carpets, rugs and furniture should be removed and

a HEPA vacuum should be used for dust control and removal. Because the

greatest health risk to persons removing contaminated material comes from

inhaling disturbed spores, people performing cleanup should use personal

protective gear, including a HEPA respirator. Experts generally agree that

special protective clothing is not necessary for small cleanup jobs. Normal

clothes washing and drying at high temperatures is sufficient to kill latent

spores. Showering with hot water and disinfectant soap afterwards is

recommended.

Most experts agree that medium to large scale Stachybotrys abatement be

performed only by qualified and licensed professions. In larger cleanup

jobs, it is important to contain the spores that are liberated during the

removal process. For this reason, the building is placed under negative air

containment (like shrink-wrapping the building), and contaminated material

is disposed of according to local ordinances. Abatement personnel must wear

high levels of protective equipment and clothing, including HEPA

respirators.

Because most of the fungal contamination discussed herein results from

chronic water intrusion, the source of the leak must first be found and

corrected before fungal remediation will be effective. Water damaged

framing lumber, plywood substrate for exterior decks and roofs, sheetrock

and cellulose-based insulation all must be removed and replaced, often for

structural or architectural reasons. Examination of wall cavities and other

inaccessible areas of a building can be performed using a borescope to both

visually inspect and perform photo-documentation of the problem.

Recent Fungus Litigation

The earliest published litigation in North America of fungal contamination

was the significant decision in 1989 by a tribunal of the Quebec government

Bureau de Revision de la Commission de la Sante et de la Securite du

Travail, which held that the growth of Stachybotrys in the workplace was a

violation of Quebec health and safety laws. In Minnesota, courts have ruled

against insurers who attempted to exclude the growth of mold and mold toxins

and allergens in wall cavities and building materials under the " pollution

exclusion " of their insurance policies.

In 1992, the Polk County courthouse in Florida evacuated 600 employees after

discovery of Aspergillus versicolor growing due to construction defects. A

jury later awarded $ 40 Million in personal injury claims in cases

involving Reliant Insurance Company. In addition, there were 200 workers

compensation claims and 180 separate lawsuits against the builders and the

county. The county was forced to make renovations to the courthouse, which

far exceeded the original cost of construction and all of the file and

papers in the archives had to be HEPA vacuumed to remove fungal

contamination.

The County Florida courthouse had similar problems. Design problems

with the building envelope and HVAC system resulted in massive contamination

by Aspergillus versicolor, Penicillium species and Stachybotrys chartarum.

Studies of the workers revealed emphysema-like symptoms coupled with

increasingly lower single-breath carbon monoxide diffusing capacity. A jury

awarded the County costs of renovating the building, which exceeded the

original cost of construction. Personal injury claims by workers are still

pending.

In California, there have been a handful of high profile fungal

contamination cases. In 1997 a Beverly Hills doctor and his wife

reportedly recovered over $ 9 Million for water intrusion and fungal

contamination to their custom luxury home and extensive art collection. In

February of 1997, a published settlement of $1.4 Million was recovered by a

husband and wife against a builder for water intrusion and fungal

contamination of their Malibu home. In February of 1998, homeowners

settled a claim against the builder of their beachfront custom home in

Ventura and against several subcontractors arising from chronic water

intrusion and fungal contamination for $559,000. In 1998, a Los Angeles

woman sued her homeowners' association for failure to repair repeated water

intrusion through her common walls. After a three week jury trial, she and

obtained a verdict in the amount of $497,000 and the association was ordered

to perform the necessary repairs. Several other cases, some involving

entire tracts of single family homes, have been filed in the past few years

alleging personal injury to the families due to exposure to toxic fungi.

In the first known wrongful death case that has been published, the parents

of an 8 month old Cleveland girl who died three days after Christmas 1994

settled their case in August of 1998 for $175,000 against the company that

managed their apartment complex. Tim G. Sweeney, the lawyer for the

apartment management company told Cleveland's The Plain Dealer, " This whole

area of indoor environmental pollution may be the next big area of law. I

believe we will be seeing many more cases like this one. " Sweeney said that

his defense at trial would have been that apartment managers weren't liable

for cleaning up the Stachybotrys fungus because little was known about the

deadly properties of the fungus in 1994. Dr. Dorr Dearborn of Rainbow

Babies & Children's Hospital did not publish his findings showing the link

between " Stachy " until January 1995. Sweeney admitted that his defense

would be tough to sell if the death had occurred later.

" If this incident happened in 1997 or 1998, it would be pretty hard for a

landlord to say that he did not know about the dangers of the fungus,

considering all the publicity about it. The story has been in the

newspapers and on television " Sweeney told The Plain Dealer.

Dan Zielinski, a spokesman for the American Insurance Association of

Washington, D.C., told The Plain Dealer that " As much as I hate to say it,

insurance companies will not take note of Stachybotrys atra until they are

faced with numerous losses because of it. Once that happens, you can be

sure that insurance companies will communicate to their clients about the

need to protect themselves. " Mr. Zielinski's association represents more

than 300 property and casualty insurance companies.

Mangum of the National Apartment Association in andria, Virginia

said that the problem of fungus and fungus-related illnesses is becoming a

concern for the organization's 25,578 members. " We have an entire file on

mold. Apartment owners need to be more diligent about repairing leaks for

more than the obvious reasons. Fungus is not something you think about

until you hear about a case and realize that a death occurred because of it.

When that happens, it's taken quite seriously. "

Litigating a Fungal Contamination Claim in a Construction Defect Action

Discovery of fungal contamination in a construction defect lawsuit can often

transform what previously was exclusively a property damage claim into

personal injury claim as well. The personal injury damages may eclipse the

actual costs of remediating the property. While many commercial general

liability (CGL) insurance policies have exclusions for " work performed " by

the insured or the " work product " of the insured, adding a personal injury

component to the case invariably increases the potential availability of

insurance coverage to settle the case or pay an adverse verdict against the

builder.

However, care should be taken regarding the statute of limitations for

personal injuries caused by fungal contamination. In the only published

decision involving this type of claim in California, the Court of Appeal

held in v. Lakeside Village Condominium Association, Inc. (1991) 1

Cal. App.4th 1611 that the one (1) year statute of limitations [Code of

Civil Procedure 340(3) ] applies to a homeowner's claim against her

homeowner's association for failure to maintain the plumbing system, which

resulted in the plaintiff suffering personal injuries from her exposure to

toxic mold. Although the plaintiff's condition was not diagnosed as immune

dysregulation until 1986, she suffered " extreme allergic reactions " and

" severe bouts of asthma " for which she sought medical attention in 1983 and

1984. The court ruled that the " delayed discovery rule " did not apply

because the plaintiff had actual knowledge of the negligent cause of her

injuries in October of 1984, when the plaintiff hired a microbiologist who

pinpointed the source of the mold in her unit and plaintiff's performed an

unsuccessful remediation. The fact that plaintiff's medical condition was

not properly diagnosed for two more years was not persuasive to the court.

Because the source and cause of water intrusion problems are often difficult

to identify and correct, coupled with the fact that Code of Civil Procedure

337.15 provides for a ten (10) year statute of limitations to commence an

action for latent defects, a potential conflict may arise between the

accrual of a homeowner's cause of action for personal injuries caused by

fungal contamination and the limitation period to sue for the underlying

defective condition which caused the fungal contamination. This conflict is

exacerbated by the three (3) year limitation period (Code of Civil Procedure

338) to commence an action for negligence arising from damage to real

property. Thus, a homeowner who discovers a roof leak has up to three years

to file suit (provided suit is filed within 10 years from substantial

completion of project), but only has one year to sue for any exposure to

toxic fungus that grows because of that leak.

However, the case is in direct conflict with the silicone breast

implant cases, which have expressly held that the one year statute of

limitations is tolled until the breast implant recipient suspected or should

have suspected that autoimmune disease may have been caused by a product

defect. See, Hopkins v. Dow Corning Corp. (9th Cir. 1994) 33 F.3d 1116. In

those cases, the courts have held that when the injury claimed in not

commonly associated with the malfunctioning product, the statute of

limitations is tolled. Because the causal connection between fungal

contamination and personal injury is not yet common knowledge to even the

medical community, let alone to lay persons, application of the one year

statute of limitations appears overly harsh to victims that do not know the

source of their medical problems until more than a year after the onset of

initial symptoms.

Selected References

1. Croft, W. A., Jarvis B.C., and Yatawara, C.S. 1986 Airborne outbreak of

trichothecene toxicosis. Atmos. Environ. 20:549-552.

2. Etzel, R., Montana, E., Sorenson, W., Kulllman, G., Allan, T., and

Dearborn, D. 1998. Acute Pulmonary hemorrhage in infants associated with

exposure to Stachybotrys atra and other fungi. Arch. Pediatr. Adolesc.

Med.152:757-762.

3. Fung, F., , R., and , S. 1998. Stachybotrys, a

mycotoxin-producing fungus of increasing importance. J. Toxicol. Clin.

Toxicol. 36:79-86.

4. Johanning, E., Biagini, R., Hull, D., Morey, P., Jarvis, B., and

Landsbergis, P. 1996. Health and immunology study following exposure to

toxigenic fungi (stachybotrys chartarum) in a water-damaged office

environment. Int. Arch. Occup. Environ. Health 68:207-218.

5. Johanning, E., and Yang, C.S., eds. 1995. Fungi and bacteria in indoor

environments. Proceedings of the International Conference, October, 1994,

Saratoga Springs, New York. Eastern New York Occupational Health Program,

Latham, N.Y.

6. Marwick, C. 1997. Floods carry potential for toxic mold disease. JAMA

277:1342.

7. , B., 1999. Stachybotrys chartarum: The Toxic Indoor Mold. APSnet

Plant Pathology.

8. Johanning, E. 1999. Hazardous Molds in Homes and Offices: Stachybotrys

atra and others. The EnviroVillage library papers.

9. Sangiacomo, M. 1998. Concerns Over Fungus Increasing. The Cleveland Plain

Dealer (8/8/98).