The crux of the matter revealed - whether a causal link between mold exposure and human health effects is established

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http://www.bizjournals.com/houston/stories/2002/04/01/focus6.html

March 29, 2002 print edition More Print Edition Stories

Mold issue continuing to grow as related litigation mushrooms

ette Wolfson and Eversole Special To Houston Business Journal

The focus on mold by the media, consumer protection groups and the

scientific and legal communities has caused mold litigation to mushroom. The

growth of mold litigation has legal and medical experts debating over the

health concerns related to mold exposure.

There are no state or federal regulatory standards establishing " safe "

levels of molds or mold spores for indoor air. However, various governmental

agencies have drafted voluntary guidelines regarding indoor air quality. The

U.S. Environmental Protection Agency has published guidance in Mold

Remediation in Schools and Public Buildings, regarding preventing mold and

remediating buildings. The Texas Department of Health established Voluntary

Indoor Air Quality Guidelines for Public Schools, which contains a brief

section on mold.

Most people are exposed to molds on a daily basis and few suffer adverse

health effects. According to the EPA, the most common health problems

associated with mold exposure are runny nose, cough, congestion, headaches,

skin irritation, allergic reactions and aggravation of asthma. Reliable

studies showing a causal connection between mold exposure and serious

illnesses have not been done.

ESTABLISHING CAUSATION

Potential plaintiffs in mold cases include building owners and operators,

homeowners, occupants, guests, tenants and landlords. Defendants are usually

builders, contractors, product manufacturers, architects, engineers, real

estate agents, previous owners, building owners and operators, property

managers, landlords and insurance carriers and heating, ventilation and air

conditioning professionals.

The most difficult element for a plaintiff to prove in a mold case is

causation. For property damage, the plaintiff must prove whose action caused

the damage. For personal injuries related to mold exposure, causation is

difficult to establish because it is impossible to quantitatively measure

mold exposure.

INSURANCE CLAIMS

While insurance policies vary, homeowners' policies provide coverage for

mold if there is a direct physical loss, unless mold is a specific

exclusion. Water and mold can be expected to cause " direct physical loss. "

The mold exclusion is generally interpreted to mean that if mold has

occurred as a result of high humidity instead of an event such as a burst

pipe, the exclusion bars coverage. However, in commercial policies, the

pollution exclusion may preclude the recovery of damages based on mold. Most

cases have found that because mold is naturally occurring, it is not a

pollutant. Furthermore, many insurance companies are now specifically

excluding mold or other fungi from their policies.

Publicity regarding recent large punitive damage awards has raised public

awareness of the damages allegedly caused by indoor mold contamination. On

Oct. 30, 2001, an Austin court entered judgment upholding a jury verdict

that awarded homeowners over $32 million in connection with damage to the

family's home caused by mold.

The plaintiffs claimed that the insurance company failed to adequately and

swiftly cover repairs from a water leak, allowing Stachybotrys to overrun

their 22-room mansion. The jury found that the insurer committed fraud and

awarded $6.2 million in actual damages for costs to rebuild the home, $12

million in punitive damages, $5 million in mental anguish, and $8.9 million

in attorney's fees. However, no personal injury damages were awarded

(plaintiffs were seeking another $70 million) because no evidence of the

health effects of mold met scientific standards.

Given the heightened public awareness of mold contamination, it is likely

that the number of mold cases and insurance claims will continue to

increase. Whether the plaintiffs will be successful depends upon whether a

causal link between mold exposure and human health effects is established.

PAULETTE WOLFSON is of counsel and SHELLY EVERSOLE is an associate attorney

in the Houston office of Winstead Sechrest & Minick PC. A longer article on

this topic by Wolfson and Eversole is in the Feb. 4, 2002 edition of BNA

Daily Environment Report.