The Asbestos of the New Millennium
By Alexander Robertson IV, As Featured in Mealey's Online, August 2001
Thirty years ago it was asbestos. Then lead, latex and MTBE became the next generation of toxic tort litigation. Today, toxic mold cases are mushrooming and have blurred the traditionally separate fields of toxic tort, construction defect and insurance bad faith litigation.
According to a recent Wall Street Journal article, Farmers Insurance, which has 7% of the U.S. homeowners insurance market, estimates that mold claims will cost it $85 Million in 2001 alone. That estimate was made prior to the $32.2 Million jury verdict in Ballard v. Fire Ins. Exchange. Michael Thompson, Chief Executive Officer of Engineering & Fire Investigations, a Houston-based subsidiary of claims specialist GAB Robins North America, Inc., says his firm did not have a single microbiologist on its staff a year ago. Last month, it hired its ninth. "It has inundated that residential marketplace. It's going to wind up being a multi-million dollar industry for us, and it was zero none months ago." A recent headline in Lloyd's Insurance Today on June 12, 2001 reported that rising toxic mold claims in the U.S. are predicted to drive homeowners' insurance premiums up by at least 10% by the fall.
Some commentators have suggested that toxic mold may be analogous to asbestos property damage or lead paint claims, but that mold-related personal injury claims are dissimilar to asbestos personal injury claims of decades ago. John J. Delany, III of Delany & O'Brien in Philadelphia agrees that toxic mold is a very serious toxic tort, but argues that there are several factors that militate against analogizing mold with asbestos personal injury claims. According to Mr. Delany, these factors include weak medical causation evidence, lack of published exposure standards, non-repetitive corporate defendants and the current failure of the plaintiff's bar to mobilize.2 Although it is unclear whether mold will equal the $21.6 Billion paid to date by the insurance industry for asbestos claims, what is clear is that recent jury verdicts around the country have "rung the bell," attracting the attention of insurers, lawyers, doctors, the media and the public.
Building Related Illness
Personal injuries caused by exposure to microbiological agents created from chronic water intrusion into the building envelope fall into the category of "Building Related Illness" (BRI). BRI differs from "Sick Building Syndrome" (SBS) in that there is an identifiable link between the causative agent discovered in the building and the illnesses of those exposed. Conversely, SBS occurs when at least twenty percent (20%) of a building's occupants complain of particular discomforts while inside the building, and the discomforts are alleviated upon leaving the building, but there is no discoverable link between the building source and the problems encountered.3 However, in the case of microbiological contamination, a very distinct link can be found between toxic mold and the occupant's illnesses.
BIOLOGY OF FUNGI
All molds are fungi, but not all fungi are molds. Molds in soil play an important role in the breakdown of leaves, wood and other plant debris. Molds are also used in making cheese, wine, beer, bread and therapeutic drugs. The term "mildew" is not interchangeable with mold, and denotes a specific group of fungi that cause plant diseases, such as powdery and downy mildew, and are not found growing in most indoor environments. While molds are ubiquitous, they require favorable conditions in an indoor environment to flourish and create a potential threat to human health. The conditions necessary for mold growth are (1) temperature range between 40 degrees—100 degrees Ferenheit; (2) nutrient base (such as cellulose in wood, paper backing on drywall, ceiling tiles, carpet backing, etc); and (3) moisture.4
Common Fungi Found In Water Damaged Buildings
Fungi commonly found in buildings with chronic water intrusion problems include Stachybotrys, Aspergillus, Penicillium, Trichoderma, Fusarium and Chaetomium among others. An excellent microbiological glossary can be found at http://www.emlab.com. or at http://www.dehs.umn.edu/fungus/myco.html.
Fungi And Mycotoxins
Several mold species, including Aspergillus, Fusarium, Penicillium and Stachybotrys can produce a wide variety of nonvolatile chemicals, commonly referred to as mycotoxins. Stachybotrys alone produces over 163 different mycotoxins. Between 1974 and 1981, the Soviet Union and its client states in such Cold War sites as Afghanistan, Laos, and Kampuchea (Cambodia) were believed to have used neurotoxins from Stachybotrys as a biological weapon.5 Trichothecene mycotoxins are a very large family of chemically related toxins produced by various species of Fusarium, Trichoderma, and Stachybotrys, among others. This family of mycotoxins causes multiorgan effects including emesis and diarrhea, weight loss, nervous disorders, cardiovascular alterations, immunodepression, hemostatic derangements, skin toxicity, decreased reproductive capacity, and bone marrow damage. [Id.] Unlike allergens, mycotoxins elicit a toxic response in virtually all individuals who come in contact with them. Aspergillus Flavus, a common indoor fungus, produces aflatoxins, notoriously potent animal carcinogens. Penicillium, while unable to produce aflatoxin, may produce more than 100 different classes of mycotoxins.
Stachybotrys chartarum (aka atra) one of the most notorious mycotoxin- producing molds, has received much publicity in both the media and in high profile closings of public and private buildings, schools, courthouses and hospitals. Various species of "Stachy," as well as Fusarium, can produce macrocyclic trichothecenes, which have potent adverse health affects on the immune system, as well as protein synthesis. Stachybotrys chartarum produces five different trichothecenes, which are both dermotoxic and cytotoxic.
Mycotoxins can enter the body via inhalation or contact with the skin. Inhalation of mycotoxins in a much more potent route of exposure, compared with ingestion. Adverse health affects have been noted in individuals who came in contact with Stachybotrys, suggesting that the toxins were absorbed through the skin.
Fungi also produce a wide range of volatile organic compounds ("VOC's"), consisting mainly of alcohols, ketones, hydrocarbons and aromatics, many of which have distinct odors. These VOC's, which are sometimes referred to as microbial VOC's or MVOC's, are typically what cause the characteristic musty or dank smell which people associate with mold growth. Odor thresholds for some MVOC's are very low, as low as 1 part per trillion.
While exposure to mold is not healthy for anyone6 inhalation of mold spores, fragments (parts), or metabolites (e.g., mycotoxins and VOC's) from a wide variety of fungi may lead to or exacerbate immunologic (allergic) reactions, cause toxic effects, or cause infections. According to the recently released report on mold by the California Research Bureau, which performs research for the Governor's office and State Legislature, "All molds under proper conditions are capable of eliciting a negative health response in humans through other methods such as inflammation, allergy or infection."7
Immunological reactions include asthma, Hypersensitivity Pneumonitis (HP), and allergic rhinitis. Skin contact with mold spores may also cause dermatitis, noted by visible red itchy patches of skin. The most common symptoms associated with allergic reactions are runny nose, eye irritation, cough, congestion, and aggravation of asthma. HP may occur after repeated exposures to an allergen and can result in permanent lung damage.8
A wide variety of symptoms have been attributed to the toxic effects of mold. Symptoms such as fatigue, nausea, headaches, respiratory distress, and eye irritation have been reported. Some of the symptoms are "non-specific," such as joint or muscle pain, inability to concentrate and chronic fatigue.
Organic Dust Toxic Syndrome (ODTS) has been classified as a serious disease resulting from exposure to a toxic species of fungi. ODTS is the abrupt onset of fever, flu-like symptoms, and respiratory distress within hours following a single, heavy exposure to dust containing organic material including fungi. ODTS differs from HP in that it is not an immune-mediated disease and does not require repeated exposures to the same agent. ODTS may be caused by a variety of bioaerosols , including common fungi such as Aspergillus and Penicillium. [Id.]
Only a small group of fungi have been associated with infectious disease. Aspergillosis is an infectious disease that can occur in immunosuppressed persons. Health effects can be severe. Several species of Aspergillus are known to cause Aspergillosis. The most common is Aspergillus Fumigatus. These species have also been called opportunistic pathogens, meaning they are organisms that can produce disease in an immuno-compromised person. [Id.]
According to the recently revised NYCDOH guidelines, infants (less than 12 months old), persons recovering from surgery, or people with immune suppression, asthma, hypersensitivity pneumonitis, severe allergies, sinusitis, or other chronic inflammatory lung diseases may be at greater risk for developing health problems associated with certain fungi. According to these guidelines, such persons should be removed from the contaminated area during remediation. Persons diagnosed with fungal related diseases should not be returned to the affected areas until remediation and fungal testing are complete.
CAUSES OF ACTION
There are a litany of potential causes of action available to the Plaintiff, including but not limited to, negligence, professional malpractice, strict liability, breach of implied and express warranties, constructive eviction, worker's compensation, violations of the American's with Disabilities Act, breach of contract, fraud, failure to disclose in the sale of property, nuisance and negligence per se if a statutory violation can be proved.9
Destructive And Non-Destructive Testing For Mold
No matter what legal theory is being relied upon, frequently the most difficult element will be causation. Thus, it is essential to conduct thorough and competent testing of the patient's environmental surroundings. When performing a site investigation, the inspector should be a properly trained industrial hygienist, and should not arbitrarily rely upon air samples to determine the existence of fungi. Results from air testing alone can be confounding and may inaccurately represent the true conditions of the indoor air environment. Fungal spores often fluctuate widely over the course of a day, and a single air sample reflects only a momentary "snapshot" condition. Certain fungi, such as Stachybotrys, have sticky spores and are rarely airborne absent some type of physical disturbance. In these cases, air sampling will be prone to false negative results, and never should be relied upon to rule out contamination.
According to the California Department of Health Services, if mold growth is visible, there is frequently no need to further characterize it by determining the types of mold present. However, a program of bulk and surface sampling is still justified so that physicians can properly diagnose illnesses of the occupants through microbial etiology and the cost and method of remediation and repair of the building can be determined based upon the level of contamination.
According to the American Industrial Hygiene Association (AIHA), studies of microbial problems in buildings have shown that perhaps 50% of microbial problems are not visible. Because of the frequency of hidden mold growth in buildings with a history of chronic water intrusion, most experienced investigators use a mixture of bulk and air sampling for biologicals. Implementing both methods of testing increases the likelihood of discovering the proximity of and defining the biodiversity of biological reservoirs.
Air sampling may be quiescent (i.e., collect sample under normal operating conditions), semiaggressive (i.e., stir up dust in reservoirs to simulate normal occupant activities), or aggressive (i.e., attempt to vigorously disturb reservoirs to establish biocontaminant source).10
As previously discussed, the AIHA believes that air sampling is not an infallible means of determining the existence of a fungal problem and must be coupled with a detailed inspection. This often includes performing destructive testing to remove water damaged drywall to inspect the back of gypsum wallboard, wood framing members and insulation. However, care must be taken to warn and protect both the investigators and the occupants of the building from unintentional contamination from destructive testing. Proper personal protective equipment ("PPE's") should be worn by testing personnel, including disposable Tyvex coveralls with hoods, latex gloves under work gloves, HEPA respirators and disposable shoe coverings.
Specific guidelines on what and how to perform mold remediation have been created by an expert panel convened by the New York City Department of Health (NYCDOH) that included representatives of the Mount Sinai Medical Center, Department of Occupational and Environmental Medicine, and the American Industrial Hygiene Association (AIHA). The NYCDOH guidelines have been widely used in mold remediation cases throughout the country. Further resources include the California Department of Health Services (CDOH), which provides a four page fact sheet on how to remove mold growth, as well as the Minnesota Department of Health (MDH). The American Conference of Governmental Industrial Hygienists' (ACGIH) publication, "Bioaerosols: Assessment and Control" is widely referred to as the "bible" for industrial hygienists and establishes the standard or care for anyone involved in performing a microbial investigation or remediation. Recently, the EPA published its guidelines, Mold Remediation in Schools and Commercial Buildings.11
The use of investigative equipment, such as borescopes, to view interstitial spaces inside wall and ceiling cavities, and duct work may be helpful to visually identify mold growth. Additionally, a moisture meter is typically used to identify areas suspected of chronic moisture intrusion before destructive testing is performed and to monitor the process of drying damaged buildings.
Information on airborne fungi generated from collecting air samples with subsequent culture on agar media has several limitations. According to AIHA, air samples impacted on agar media can greatly underestimate the total propagule numbers present for three reasons: (1) decline in propagule viability with age and exposure to ambient environmental conditions; (2) choice of agar medium; and (3) damage to propagules during sampling. Fungal spores decline in viability from the moment they are produced. Spores of Stachybotrys Chartarum (atra) decline in viability very quickly. Hence, according to the AIHA, the finding os Stachybotrys from air samples collected on culture media must be treated differently than a finding of a Penicillium species. In general, the numbers of propagules determined by culture are substantially less than those determined by direct methods.
A proper investigation should include both viable (culturable) and non-viable fungal particles. Therefore, when collecting air samples, collect both types of particles. Viable sampling is usually performed using an Anderson or similar impaction sampler which pulls air across an agar plate at a flow rate of 28.3 liters per minute. Small particles are deposited upon this plate, which is subsequently incubated and the resultant colonies identified and enumerated microscopically. Spore counts are then converted to the number of colony-forming units ("cfu's") per cubic meter of air sampled. There are a variety of different types of agar which can be used, depending on the type of fungi being sampled. No one agar is ideal for all types of fungi. Malt extract agar (MEA) is a good general purpose agar for screening. When sampling specifically for Stachybotrys, cornmeal agar (CMA) or Czapek cellulose agar (CCA) are more suitable.
Non-viable particles are typically collected using a spore trap sampler, such as the Burkhardt or a slit impaction device, including the AIR-O-CELL Bioaerosol Cassette. Air is pulled through the sampler and particles deposited on a grease-coated glass slide. The samples are then microscopically examined and the total number of spores per cubic meter determined. Tentative identification of many types of spores can also be made, though typically only the genus (i.e., Penicillium) can be ascertained.
When conducting any type of air sampling, samples must also be collected outside the building of the ambient air so that a comparison between the genus and number of spores found indoors can be compared to those found outdoors.
The AIHA offers accreditation to microbial laboratories through its Environmental Microbiology Laboratory Accreditation Program (EMLAP).
Interpretation Of Results Of Microbiological Testing
There are no "official" standards or guidelines for fungal or bioaerosols. Some researchers have expressed an opinion that 100-250 cfu's are acceptable, provided no opportunistic fungi are present. The same range is also used by the U.S. Public Health Service, Federal Employee Occupational Service (Region III). A range of concentrations proposed by the World Health Organization and Health Canada suggests that microbial concentrations below 50 cfu for a single species (other than outdoor common fungi), 150 cfu for a mixture of species reflective of the outdoor air spores, or 500 cfu during the summer for common outdoor fungi (such as Cladosporium) are acceptable. There are other ranges (called background numbers or guidelines) used by organizations such as the American Conference of Governmental Industrial Hygienists (ACGIH) and OSHA. A bill currently pending before the California Legislature (SB 732-Ortiz) seeks to authorize the CDHS to establish permissible exposure limits (PEL's) for exposure to molds, as well as require disclosure in the sale and rental of property by an owner when mold has caused adverse health conditions, as well as license persons involved in the investigation and abatement of mold.
Since there are no governmental established guidelines yet to follow regarding airborne fungi, indoor results must be interpreted with respect to the control samples. In general, mechanically ventilated buildings should have indoor fungal counts that are lower than those found outside. In addition, the species found inside should be similar to those identified outside the building. A situation should be considered unusual when the fungal levels inside are an order of magnitude or greater than those found in the outdoor control sample. Further, the presence of any slimy-spored toxigenic fungi, such as Stachybotrys chartarum and Fusarium moniliforme, should be considered unusual, and may suggest an indoor contamination source. The consistent detection of some fungi, such as Aspergillus or various species of Penicillium, could indicate water damage and subsequent fungal amplification.
Additionally, a comprehensive building assessment should include an investigation into the heat, vent and air conditioning (HVAC) system to determine if the building complies with standards established by the American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE). HVAC operation should meet air exchange rates specified in the current ASHRAE standard and the operations and maintenance (O&M) plan for a commercial or multi-family building should address this important IAQ issue.12
EXPERT TESTIMONY IN TOXIC MOLD CASE
Undoubtedly, the success of any microbiological contamination case will revolve on the admissibility and credibility of the expert witnesses. Experts in these type of cases can include mycologists, microbiologists, industrial hygienists, neuropsychologists, immunologists, toxicologists, and occupational and environmental medicine doctors.
The test for the admissibility of scientific expert testimony in federal courts was established in Daubert v. Merrell Down Pharmaceuticals, Inc. (1993) 509 U.S. 579. In that case, the court held that the trial court must determine whether the expert testimony constitutes scientific knowledge by analyzing the following factors:
1. whether the theory has been subjected to peer review or publication;
2. whether the theory can be or has been tested;
3. whether there is a known, acceptable rate of error, and
4. whether the theory is generally accepted.
Most mold cases filed in California will be filed in state court, therefore the Daubert factors will not apply. The standard of admissibility for cases filed in California was established in People v. Kelly (1976) 17 Cal.3d 24 (often referred to as the "Kelly/Frye" standard). Under this decision, new scientific evidence is only admissible on a showing of scientific reliability demonstrated by substantial agreement and consensus in the scientific community. The factors that the court established in that case include:
1. whether the new scientific method is shown to be reliable;
2. whether the witness is qualified as an expert in the field, and
3. whether the theory or method in question was implemented according to proper scientific procedures.
Regarding statistical techniques, Kelly/Frye will only apply if the statistical technique is "scientific", meaning whether it appears in both name and description to provide some definitive truth. People v. Leahy (1994) 8 Cal.4th 587. The statistical technique must also be "new" for Kelly/Frye to apply. "New" means new to both law and science. People v. Stoll (1989) 49 Cal.3d 1136. Kelly/Frye will not apply if the expert is merely stating an opinion based upon commonly used statistical formulae. Texaco Producing, Inc. v. County of Kern (1998) 66 Cal. App.4th 1029.
Despite certain commentator's opinions to the contrary, the application of the Daubert factors to toxic molds cases has rendered conflicting results, to say the least. On May 9, 2001, the trial judge in Ballard v. Fire Ins. Exchange, No. 99-05252 (Tex. Dist. Ct.) granted the defendant's motion to exclude causation opinion testimony of the plaintiffs' medical experts. In Ballard, the only personal injury claim that was at issue was Ronald Allison's claim that he suffered cognitive dysfunction as a result of mycotoxin exposure. Although the trial judge initially denied the defendant's motion, on the first day of trial he reversed himself and granted Farmer's motion, relying upon Merrell Dow Pharmaceuticals v. Havner, 953 S.W.2d 706 (Tex. 1997). In Havner, the Texas Supreme Court excluded the plaintiff's expert testimony that the drug Benedictine causes birth defects when ingested by expectant mothers. Under Havner there must be multiple epidemiological studies where the 95% standard is met and there is more than a doubling of the risk of injury when exposed to the toxic substance. This means that if the studies were duplicated, 95% of the scientists duplicating the study would get the same results.
Just two days prior to the trial judge's decision in Ballard, the Delaware Supreme Court upheld a jury verdict of $1 Million for personal injuries sustained by one tenant and an award of $40,000 for personal injuries sustained by her roommate, against their landlord for failure to maintain their mold contaminated apartment. New Haverford Partnership v. Stroot (Mealey's Litigation Report: Mold, Vol. 1, #6, Page 4). The irony of the Stroot decision is that the Delaware Supreme Court ruled that the testimony by the very same experts who were excluded in the Ballard case was properly admitted by the Stroot trial court. The medical experts involved in both cases were Eckardt Johanning, M.D., an occupational and environmental medicine doctor, and Wayne Gordon, Ph.D., a board-certified neuropsychologist.
The Delaware Supreme Court held that the voire dire established that the methodology employed by the plaintiffs' experts was reviewed by peers and generally accepted in the scientific community and that the trial court properly exercised its gate keeping function in admitting the plaintiffs' experts' testimony. In addition to the reliability of the plaintiffs' experts, the defense also objected to the admission of expert testimony on causation. The landlord contended that the plaintiffs' experts conducted all of their investigations and obtained all of their physical evidence in 1994, despite the fact that the last time the plaintiffs occupied the apartment was in 1992. The landlord argued that, since there was no testing in 1992, plaintiffs' experts had no reliable basis on which to opine about the 1992 conditions. The Delaware Supreme Court rejected this argument, stating "This argument ignores the fact the plaintiffs were able to provide factual information about the conditions in 1992; that Stroot's increased health problems began in 1992; and that the water damage and mold levels observed in 1994 were the result of long term water problems in the building. While the experts' opinions about the 1992 conditions may not have been as well supported as their opinions about the 1994 conditions, they were still within the realm of scientific reliability and the trial court acted within its discretion in allowing them."
The clear conclusion from review of the Ballard and Stroot cases is that there have been inconsistent rulings concerning the admissibility of testimony by the very same experts in two different Daubert jurisdictions. Accordingly, too much emphasis should not be placed upon the trial judge's decision in Ballard, particularly in jurisdictions other than Texas.
For those jurisdictions which follow the expert admissibility standard established in Frye v. U.S. (1923) 293 F.1013(D.C.Cir.), a review of the Florida Court of Appeal's decision in Centex-Rooney Construction Co., Inc. v. Martin County, No. 96-2537, Fla. App., 4th Dist. is warranted. The most notable portion of the appellate decision to uphold the judgment was the affirmation of the trial judge's admission of expert testimony by two doctors (including Eckardt Johanning, M.D.) suggesting the existence of a health hazard stemming from the presence of toxic molds in the building. The appellate court found that the County had met its burden under Frye v. U.S., noting that both experts testified about numerous publications accepted by the scientific community recognizing the link between toxic mold exposure and adverse health consequences. On August 21, 1998, the Florida Supreme Court declined to hear the defendant's appeal of the $14.1 Million verdict in favor of Martin County, Florida. Following the Supreme Court's denial of the petition for review, Centex-Rooney Construction co. paid the County a total judgment exceeding $17.3 Million.
Insurance Coverage For Mold Claims
Third Party Claims
In recent years, the "absolute pollution exclusion" that began appearing in commercial general liability (CGL) policies in the mid-1980's, has been used by some insurers to deny claims resulting from mold damage. The customary pollution exclusion provides that coverage doesn't apply to "bodily injury or property damage arising out of the actual, alleged, or threatened discharge, dispersal, release, or escape of pollutants at or from premises you own, rent or occupy." Pollutants are generally defined as "any soluble, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids alkalis, chemicals and waste."
Despite many insurer's insistence that the "absolute pollution exclusion" does not cover mold claims, courts are split on whether the exclusion bars coverage. Very few cases have been litigated on the issue of whether the pollution exclusion in a CGL policy bars coverage for a mold claim. The different types of IAQ lawsuits, ranging from exposure to excessive carbon monoxide concentrations to SBS cases based on mold exposure, present different factual scenarios that may require different application of the pollution exclusions. The applicability of the absolute pollution exclusion depends upon the resolution of two issues — whether there has been a "discharge, dispersal, release or escape" and whether this discharge involved a "pollutant" as defined by the policy.13 However, in at least one decision, a Georgia Court of Appeal rejected an insurer's defense that the pollution exclusion in a CGL policy excluded coverage for personal injuries caused by mold contamination.14
First Party Claims
Contrary to the divergent opinions found across the country interpreting coverage for mold claims under a CGL policy, coverage generally exists under a homeowner's policy for property damage caused by mold contamination.15 Mold is covered by the homeowner's policy if it is the result of a covered loss. Further, when there is a covered loss, a mold exclusion is not applicable. Pipe leaks, rain damage and accidental discharge or overflow of plumbing fixtures are examples of covered losses.
In Bethany Bowers v. Farmers Insurance Exchange, a Washington Court of Appeal held that coverage exists under the homeowners' policy for vandalism caused to the insured's home by a tenant growing marijuana in the basement, which caused moisture damage and mold growth. Farmer's had paid to replace damaged paneling in the basement, but denied the mold-related claim. In interpreting the policy, the appellate court found that the tenant's activities had caused a "sauna-like environment" in the basement, causing damage to the insured's house. The court concluded that the tenant's acts constituted vandalism, which were the "efficient proximate cause of the loss."16
In Home Insurance Co. v. McClain, a Texas appellate court dealt with rain damage from a leaking roof. The leaking water collected and soaked the studs behind interior walls causing mold contamination to the home. The insurer argued that the policy barred coverage for loss caused by "mold or fungi" even if the mold was caused by water damage. The appellate court held that the insurer ignored that the ensuing loss provision in the policy was not limited by the mold and fungi exclusion. Although the water damage was not the result of the mold and fungi, it was the result of a defective roof. Thus, the application of the exclusion depends on the application of the ensuing loss provision. The court found that the loss that followed the water damage was caused by water damage. Therefore, the exclusion for fungi and mold damage did not apply.
PRESENT PUBLISHED VERDICTS & SETTLEMENTS OF MOLD CASES
The frequency of microbiological contamination cases being reported in the media and medical journals is also translating to published verdicts and settlements in legal publications. Because most of these cases involve a recovery for both property damage to repair and remediate the defective conditions, as well as for personal injury, it is difficult to extract an amount paid for each category of damage. However, there have been a number of cases reported over the past few years involving single family homes or condo units, which provide a good idea of the value of such claims on a per unit basis.
In May of 1999, a Simi Valley woman recovered $350,000 against her homeowner association for failure to repair and remediate chronic water damage to her condo and for her personal injuries suffered from exposure to toxic molds, including Stachybotrys. The Plaintiff also contracted Meniere's Disease as a result of microbiological contamination of her unit.18
In May of 1998, the owners of a 7,000 square foot custom home in Playa Del Rey, California settled their case against the builder for $900,000 when the ceiling caved in as a result of roof leaks before they even moved in. Stachybotrys was found in many locations in the house.19
In February of 1998, three families in Alameda County, California settled their case against their homeowner's association for $545,000 after leaky pipes caused toxic mold to grow in the crawlspaces of their condo units. The plaintiffs reported depression, anxiety, emotional distress, gastrointestinal maladies, vomiting, diarrhea, respiratory tract infections, severe headaches, fatigue, lethargy and other symptoms. Blood samples showed elevated antibodies to neurotoxin-producing molds, including Stachybotrys, Aspergillus and Penicillium.20
In November of 1997, a Rialto, California family settled their case against the City of Rialto for $600,818 after raw sewage spewed from the family's drains and toilets when a city contractor caused a backup of the city sewage system. The plaintiffs' complained of neurotoxins causing diffuse brain damage to the father, gastrointestinal maladies, respiratory tract infections, severe headaches, fatigue, and mental problems. Blood tests from three of the six family members showed elevated antibodies to neurotoxin-producing molds.21
In February of 1997, the owners of a Malibu, California beachfront home recovered $1,353,000 for mold contamination of their home they had purchased new for $2.5 million from the defendant. The husband complained on mild respiratory problems and headaches in response to exposure to mycotoxins released by Stachybotrys. The wife, who was previously diagnosed with an immuno-compromised condition, suffered flu-like symptoms, sore throat, diarrhea, headaches, fatigue, dermatitis, and general malaise. Plaintiffs' cost to repair the home was $662,000.22
In May of 2000, the Delaware Supreme Court upheld a jury verdict of over $1,000,000 to a tenant whose health was damaged from exposure to toxic molds in her apartment.23
In 1998, a jury awarded a California woman $495,000 after suing her condominium association for failure to repair repeated water intrusion, which caused mold growth and resulting personal injuries.24
In September of 1999, a lawsuit was filed on behalf of 65 former employees of Forest City Enterprises alleging over $100 million in damages for the company's alleged requirement of employees to renovate two apartment projects in California that contained asbestos, toxic mold and lead paint, without any safety equipment or disclosing the presence of these hazardous materials.
In June 2001, a Texas jury awarded homeowners of 22 room mansion $32 Million in their first party bad faith lawsuit against a subsidiary of Farmers Insurance Group, which a jury claim mishandled the family's claim for water damage and ensuing toxic mold exposure. In an 11—1 poll, the jury awarded the family $6.2 Million in actual damages, finding that the house will have to be decontaminated, leveled and rebuilt. They also awarded $12 Million in punitive damages, $5 Million for mental anguish and $8.9 Million in attorneys' fees.25
In December 1997, a $14 Million judgment was affirmed by the Florida Court of Appeal against the contractor of the Martin County Courthouse for sick building syndrome and construction defects. In April of 1996, an Indian River, Florida jury awarded Martin County $11.5 million against a construction manager and three surety companies. The county alleged that two buildings evacuated in December 1992 suffered from construction defects, which resulted in leaks to the building's exterior skin and problems with the air conditioning. Water intrusion and high humidity fostered the growth of toxic molds and mildew in the buildings. It is important to note that this jury verdict only dealt with property damage and did not include any personal injury claims, which were the subject of separate cases.
The trial judge reduced the jury's award by $2.75 million, reflecting the amount received by the county in pre-trial settlements with other defendants. The court entered an amended final judgement for $14.2 million, including $8.8 million in damages and $5.4 million in prejudgment interest.
In October of 2000, a jury awarded a 98 year old man $500,000 in compensatory damages and $18 million in punitive damages against his homeowner's insurance carrier for handling his mold-related property damage claim in "bad faith." The trial judge subsequently issued a remittitur and reduced the total award to approximately $3.3 million. Both the homeowner and the insurer are appealing the judgment.26
1. Wall Street Journal, June 6, 2001.
2. Insurance Coverage Claims Handling Strategies, Litigation Forum, Inc., June 2001.
3. Environmental Law in an Office Building: The Sick Building Syndrome, 9 J. Envtl. L. & Litig. 173 (1994)
4. EPA, Building Air Quality, A Guide for Building Owners and Facility Managers, Appendix C, 141 (Dec.1991).
5. Textbook of Military Medicine, Medical Aspects of Chemical and Biological Warfare, Office of the Surgeon General, Department of the Army, United States of America, p. 656 (1997).
6. California Department of Health Services (CDHS), Mold in My Home: What Do I Do? (Mar. 1998) www.cal-iaq.org/mold9803.htm
7. Molds, Toxic Molds and Indoor Air Quality, California Research Bureau, Calif. State Library, CRB Vol. 8, No. 1, March 2001.
8. New York City Department of Health (NYCDOH), Guidelines on Assessment and Remediation of Fungi in Indoor Environments (April 2000) www.ci.nyc.ny.us/html/doh/htlm/epi/moldrpt.1.htlm1#exec.
9. Alexander Robertson, IV , Esq., Microbiological Contamination Litigation, a/k/a "The Mold Monster", Mealey's Emerging Toxic Torts, Vol. 8, #23, 26 (Nov. 24, 1999) www.mealeys.com
10. American Industrial Hygiene Association (AIHA), Field Guide for the Determination of Biological Contamination in Environmental Samples (1996).
12. National Multi-Housing Council, "Mold in Apartment Buildings" (Jan. 2001)www.nmhc.org>.
13. Miles & Stockbridge, "Are Mold Claims Excluded from Your CGL Policy?," Mealey's Litigation Report: Mold, Vol. 1, #3 (March 2001) /www.mealeys.com>.
14. Stillman v. Travelers Insurance Co., Nos. 93-5245 and 94-4113, (11th Cir.1996); See, Mealey's Emerging Toxic Torts, Vol. 5, #7 (July 12, 1996), Document No. 15-960712-020 www.mealeys.com.
15. Hagans and Janecek, "Mold: It Generally is Covered by the Homeowner's Policy," Mealey's Litigation Report: Mold, Vol. 1, #3, March 2001 www.mealeys.com
16. Mealey's Emerging Toxic Torts, Vol. 8, #22 (2/22/00) www.mealeys.com
17. Mealey's Emerging Toxic Torts, Vol. 8, #22 (2/22/00) www.mealeys.com
18. Tri-Service Reference No. S99-09-19; Jan Hickenbottom v. Raquet Club Villa HOA, VCSC CASE NO. SC 020 526.
19. Confidential Report for Attorneys, CRA No. 10272, 1998 Issue, pp. 12-54; Doe Homeowners v. Roe Builder.
20. Confidential Report for Attorneys, CRA No. 9855; 1988 Issue; pp. 08-76; Jacqueline Berry, et. al. v. Mission Terrace HOA, et. al., ACSC CASE NO. H-182260-5.
21. Confidential Report for Attorneys, CRA No. 9190; 1988 Issue; pg. 02-35; Hector Komiyama, et. al. v. City of Rialto, et. al., SBSC case no. SCV 25238 & SCV 31786 www.mealeys.com
22. Confidential Report for Attorneys, CRA No. 8795; 1997 Issue; pg. 10-53; Doe Homeowners v. Roe Seller, et al.
23. Stroot v. New Haverford Partnership, No. 95C-05-074-HLA, 1999 WL 753916 (Del. Super. Ct. May 11, 1999.
24. Moller v. Atherton Homeowners Assoc., No. BC 161657 (L.A. Co. Super. Ct.).
25. Ballard v. Fire Ins. Exchange, (Mealey's Litigation Report: Mold, Vol. 1, #6, Page 6).
26. Anderson v. Allstate Insurance Co., Mealeys'Litigation Report: Mold, Vol. 1, #3 (March 2001) www.mealeys.com