Toxic mold permeates business, personal life

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http://www.bizjournals.com/sacramento/stories/2002/07/01/story5.html

From the June 28, 2002 print edition

Mold Rush

Toxic mold permeates business, personal life

Staff Writer

Most mold is harmless. But toxic mold threatens to become a monster. In

Antelope, 270 tenants were cleared out of the 190-unit Deer Park Apartments

so the rentals could be treated for mold. On Watt Avenue, a family was

awarded a $2.7 million verdict for injuries to their health that the jury

blamed on mold.

Insurers are asking the state to reduce their exposure to mold damage.

Property owners are paying thousands of dollars to test rentals for

potential mold problems. And despite efforts to come up with standards and

objective data about the health risks of mold, both are still scarce even as

the number of mold-related lawsuits mushrooms.

These trends and others are why, starting today, the Business Journal is

taking a three-part look at mold, the human and business impact, and where

the problem seems to be headed. Today's stories look at the health and

science of mold -- what's real and what isn't; what all this means to the

real estate and construction industry; and ambitious new federal legislation

that was expected late this week.

On July 5, we'll look at state and federal legislation related to mold,

what's happening to the insurance industry, the troubles in Texas that

Californians hope to avoid, and the exploding litigation associated with

mold. On July 12, the Business Journal will examine efforts to understand,

clean and prevent mold, how lenders are responding, and what might be coming

next. You'll also meet a mold dog.

From two calls a month to 60: For most people, mold is a minor nuisance at

best. Out of thousands of varieties, perhaps 50 to 100 cause any problems.

But when mold causes pain, the damage is real.

Scores of homeowners, renters, office workers and schoolchildren are

suffering nosebleeds, asthma, fatigue and memory problems that they

attribute to mold exposure. In a few cases, entire houses are torched to rid

a property of mold.

Mold is forcing apartment owners to clear out hundreds of tenants and repay

them for belongings that are contaminated and destroyed.

Some homeowners and builders are having trouble finding insurance. Lenders

are watching, wondering if loans they make against properties could be at

risk -- as long as insurance is available, they figure they're OK.

Homeowners who discover mold are fretting over what to do, and get

contradictory answers because there are no credible or clear environmental

standards on mold.

The state Department of Health Services knows that more people have

questions about mold, based on the increasing number of calls received by

its air-quality hotline.

In 1997, the department averaged 10 calls per month, with 22 percent asking

about mold, says McNeel, research scientist of the department's

Environmental Health Investigations branch. Now the air-quality staffers

field about 100 calls per month, of which 60 to 65 percent are mold-related.

Some observers contend that mold is the new asbestos and has reached a

crisis stage. It's not that mold is new. Mold has become a significant

problem in recent years because buildings are being built tighter for energy

efficiency without attention to adequate ventilation. At the same time,

families are more apt to keep windows closed while everyone's away during

the day. And at night, the windows may remain closed because people fear

crime.

In Greater Sacramento, the opening of Sacramento's police and fire

headquarters was delayed because mold was found in the building's ducts. A

Folsom fire station and the main office of the city of Citrus Heights were

emptied while crews removed mold. The California Job Journal sued its

landlord after workers became ill from mold. The case settled and the

building was gutted.

Juries hand out millions: The $2.7 million awarded to the family that lived

in the Watt Avenue apartment is believed to be the largest personal injury

award to date nationwide that is related to mold. That case was appealed and

a confidential settlement was reached.

In 2000, a Placerville homeowner in his 90s was awarded $18 million in

punitive damages against Allstate Insurance Co. for its alleged bad-faith

handling of a claim that involved mold. A magistrate later slashed the

amount to about $2.4 million. The case is still on appeal.

A few celebrity mold-related lawsuits have brought significant attention to

mold. Environmental activist Brockovich helped lobby in Sacramento in

support of mold legislation after mold took hold in her house, allegedly

from a construction defect.

Former " Tonight Show " sidekick Ed McMahon sued his insurance company for

allegedly mishandling a water leak and mold claim in his Beverly Hills

mansion. His family fled. McMahon claims the mold exposure killed his

sheepdog.

A jury verdict of $32 million to a family in Texas brought tremendous

national attention to mold. The family sued its insurance company for

bad-faith for alleged improper handling of water leaks in their mansion. The

case is on appeal.

Now around Sacramento and across the country, the number of mold-related

lawsuits being filed is more than some attorneys can handle.

Sacramento attorney Frenznick of Wilke Fleury Hoffelt Gould & Birney

LLP says he feels like he's given his life to mold. But he's taken the

unusual step, at least in legal circles, of using a public relations firm to

help bring attention to the cause. One news release carried the headline:

" Refugee Family Flees Ruined Home: No Help In Sight from Officials. " That

release explained that Frenznick represents a Placerville family that's

battling mold, its landlord and the government.

The public relations company is under contract with the law firm anyway, and

Frenznick wasn't trying to gain any more clients as a result of the

releases, he says. " I don't need any help with that, " he says. " This is not

a mold PR blitz. "

Instead, Frenznick says that certain cases deserve public attention. When

people are being treated badly, as he contends this particular family is,

the public needs to know.

Frenznick says he " hardly ever " sees a mold case in which the mold problem

was a result of bad housekeeping by the resident. " That is a familiar

mantra, " he says, but " juries are not buying that. "

Tenants could do more: Tom Finnegan doesn't agree. He owns a Sacramento

apartment complex and is being sued by several residents who claim mold in

their units made them sick. He's frustrated that tenants don't take more

responsibility for taking care of their apartments.

He recalls visiting in January a unit of two college-student tenants who

each took 20-minute showers. Inside it was at least 75 degrees, water

dripped off the closed window and the walls, and the apartment felt like a

steam room, he says.

For years, Finnegan has given new tenants a list of do's and don'ts. When

some tenants told him they didn't like the noise of the bathroom exhaust

fans, he wired the fans so they came on automatically with the light.

There are horrible landlords, he admits. And some irresponsible tenants.

In a similar vein, some people are sensitive to mold and have suffered

health problems. Experts say there are also fakers trying to exploit the

panic and unknowns surrounding mold.

Some suggestions: The solutions to the mold problem are many, observers say.

To prevent mold, construction practices must change.

In existing buildings, residents, workers and landlords must take preventive

steps, such as using bathroom exhaust fans, routinely inspecting for water

leaks, and cleaning small patches of mold before it becomes a problem. If a

problem occurs, landlords and insurance companies need to be responsive.

Research is needed to determine acceptable exposure limits to mold.

Remediators need to be certified. And some observers would add that the

government needs to step in to pay for research, inspect buildings, set

standards for builders and remediators, and provide a mold insurance pool or

some other insurance option.

Lift the carpet: For 29-year-old twins Carey and of

Sacramento, their answer is to be more aware of the problem. Carey was

unlucky enough to live in two successive apartments with mold. She and

shared an apartment in the Fairways in Citrus Heights, a complex that became

the subject of a class-action lawsuit involving mold. They received a

settlement of $13,000.

That's not much, Carey says, considering they had to discard all their

belongings because of contamination. Tossing the stuffed animals and photo

albums, she says, " were the main heartbreaker. "

Carey, a writer, then moved into the Pavilions at Sunrise in Citrus Heights,

a complex that's also the subject of litigation involving mold. Carey is a

plaintiff, and that case continues.

Most of Carey's health problems that she links to mold exposure -- burning

feet and headaches -- are gone now that she lives in what she believes is a

healthy apartment in midtown Sacramento. , a TV news producer, has

chronic ear infections, bleeding in her left ear and has lost some hearing.

She no longer lives in the old apartment.

The sisters believe strongly in carefully inspecting a residence before

deciding to make it home. Be educated, ask questions, lift up the carpet,

Carey urges.

Equally important, perhaps, is to avoid going to extremes. " There is a

general sense of panic in the community, " says Frenznick. But the

plaintiff's attorney says there's no reason for it.

" I haven't seen a case where somebody died from mold exposure, " he says.

" When the exposure is eliminated, people generally get better. "

Copyright 2002 American City Business Journals Inc.