'The Mold Monster'
By Alexander Robertson IV, Mealey's Online, November 24, 1999
Because Americans spend between 75% to 90% of their time indoors, they are exposed to a variety of indoor air pollutants, which the Environmental Protection Agency ("EPA") claims may have between 100 and 200 times the actual amount of pollutants found in outdoor air. [EPA's Indoor Air Quality Home Page] Lawsuits arising from indoor air pollution typically involve both personal injury and property damage components. Personal injuries caused by indoor air pollution fall into three categories: sick building syndrome ("SBS"), building related illness ("BRI ") and multiple chemical sensitivity (""MCS").
Personal injuries caused by exposure to a microbiological agent created from chronic water intrusion into the building envelope fall into the category of sick building syndrome. At least one commentator has suggested that 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 where there is no discoverable link between the building source and the problems encountered. Pyle, Environmental Law in an Office Building: The Sick Building Syndrome, 9 J. Envtl. L. & Litig. 173 (1994). However, in the case of microbiological contamination, a very distinct link can be found between toxic mold and bacteria and the occupant's illnesses.
This paper will focus on the legal aspects in California of both property damage and personal injury claims arising from microbiological agents found in structures, which are the result of chronic water intrusion into the building envelope caused by construction defects.
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, and violations of the Unfair Competition Act pursuant to Business & Professions Code section 17200 et. seq.
The most common cause of action asserted for mold contamination is negligence.The Elements of this tort are: (1) the defendant owed a duty of care to the plaintiff; (2) the defendant breached that duty by a failure to exercise ordinary or reasonable care that a person of ordinary prudence would use under similar circumstances; (3) the plaintiff was injured; and (4) the breach was the proximate cause of the injury, damage or loss to plaintiff. See, California Jury Instructions, BAJI No. 3.00 & 3.01. This cause of action is commonly used in actions against builders, general contractors, design professionals and subcontractors for alleged negligence in the performance of their duties. Sabella v. Wisler (1963) 59 Cal. 2d 21; See also, Del Mar Beach Club Owner's Ass'n v. Imperial Contracting Co. (1981) 123 Cal. App. 3d 898. In addition to any obligation contained in the lease, landlords have a both a common law and statutory duty to make repairs and take steps to ensure that the property is fit for human habitation. Civil Code section 1941. Homeowners Associations have the duty to maintain, repair and replace the "common areas" of a common interest development pursuant to the Conditions, Covenants & Restrictions ("CC&R's") and Civil Code section 1364. The Board of Directors owe a fiduciary duty to the homeowner/members to discharge their duties as well. Ravens Cove Townhomes, Inc. v. Knuppe Dev. Corp. (1981) 114 Cal. App. 3d 783.
For more than three centuries, the general rule governing the purchase of real estate was caveat emptor, or let the buyer beware. However, beginning in 1969, courts in California began recognizing a homeowner's right to sue a builder of mass produced housing (e.g. condos, tract homes) under a strict liability theory. Avner v. Longridge Estates (1969) 272 Cal. App. 2d 607. This theory of liability evolved from products liability law. In order to prove this cause of action, the plaintiff must show that the defendant was involved in the mass production of housing, that a defect in the house exists , damages were proximately caused by the defect and that the defendant caused or created the defect. The plaintiff is not required to prove that the defendant failed to follow the standard of care of similar builders in the community, an essential element of the negligence cause of action. It is important to note that this theory does not apply to subcontractors, design professionals or to commercial property.
BREACH OF WARRANTIES
For new construction of both residential and commercial properties, the courts have created an implied warranty that the structure was designed and constructed in a reasonably workmanlike manner. Pollard v. Saxe & Yolles Development Co. (1974) 12 Cal. 3d 374. Similarly, a builder or seller of real property may expressly warrant the condition of the construction and improvements, which is a contractual cause of action. For the tenant, the courts have modified the common law duty of the landlord to maintain and repair residential premises by creating an implied warranty of habitability. Knight v. Hallsthammer (1981) 29 Cal. 3d 46.
When a landlord breaches an implied covenant of habitability, or covenant of quiet use and enjoyment, a constructive eviction may occur. The landlord's breach of the covenant may entitle the tenant to recover monetary damages from the landlord for a constructive eviction. Barkett v. Brucato (1953) 122 Cal. App. 2d 264.
The legislature has enacted a broad statutory scheme in California to compensate workers who are injured on the job. However, an injured worker is barred from suing his employer for an injury if worker's compensation insurance is maintained by the employer. Labor Code section 3602 (a).
FAILURE TO DISCLOSE
Every person who sells or transfers title to residential real estate must disclose all facts that materially affect the value or desirability of the property. Easton v. Strassburger (1984) 152 Cal. App. 3d 90. Individual sellers must comply with Civil Code section 1102, which requires the seller, the listing (seller's) agent and the buyer's agent to complete and deliver to all prospective buyers a standardized form containing information about the property, commonly referred to as a Transfer Disclosure Statement ("TDS"). Real estate agents are also required to conduct a reasonably competent and diligent visual inspection of the property offered for sale and to disclose to a prospective buyer all facts materially affecting the value or desirability of the property that an investigation would reveal. Civil Code section 2079. Several cases have further defined these duties. In one case, a seller of a condo in an HOA delivered a TDS to the buyer before escrow closed, stating that she was unaware of any flooding, drainage or grading problems. However, prior to this, seller had completed a homeowner's questionnaire sent to her by her HOA, wherein she reported a white residue on the interior concrete wall of her garage and algae or fungus on the exterior of the wall. Seller's real estate agent noted on her portion of the TDS that she knew nothing to contradict Seller's representations, but that she knew that some other units in the HOA had experienced water intrusion. Prior to the close of escrow, the HOA sent a letter to all homeowners, including Seller, that the HOA had recently filed a construction defect lawsuit against the builder. Seller forwarded a copy of the announcement to the buyer. One month after escrow closed, buyer discovered water intrusion damage when she removed a portion of the carpet in her unit.
Buyer sued the Seller and seller's brokers for failure to disclose. The court of appeal finally ruled that the seller was not required to disclose past occurrences of algae or white residue in seller's unit, because she believed the unit had been repaired and she saw no signs of the problem reoccurring prior to sale. As to Seller's broker, the court held it was sufficient disclosure to state that some of the units, but not the subject unit, had experienced leaks and that the litigation by the HOA had been filed against the builder. Pagano v. Krohn (1997) 60 Cal. App. 4th 1.
Likewise, there is no duty for a real estate agent to make inquiry to the HOA whether there exists any construction defects or if the HOA is currently involved in a construction defect lawsuit. Padgett v. Phariss (1977) 54 Cal. App. 4th 1270. Additionally, the HOA has no duty to tell a prospective purchaser about construction defects or the existence of a lawsuit against the builder to repair the defects. The HOA is not acting as a seller, is not a party to the sale contract, and doesn't assume any special relationship with the buyer. Kovich v. Paseo Del Mar HOA (1996) 41 Cal. App.4th 863.
COMMON FUNGI FOUND IN WATER DAMAGED BUILDINGS
Fungi commonly found in buildings with chronic water intrusion problems include Stachybotrys, Aspergillus, Penicillium and Trichoderma, among others.
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. The Soviets are believed to have used neurotoxins from Stachybotrys as a biological weapon against Afghanistan. Even in low concentrations, these chemicals can cause adverse health effects, including skin irritation, pathogenic disease, cancer and immune disorders. 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, 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. In one study, an extract of various Stachy‑produced trichothecenes was given to rats. It resulted in their deaths within 24 hours.
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.
ALLERGIC REACTIONS TO FUNGI
The health affects documented from exposure to fungi are typically a result of their spores. Repeated heavy exposures to fungal spores may result in two different types of allergic reactions. Type I, also known as an "immediate" reaction, involves chronic exposures to a microbiological agent over months or even years and may result in an overreaction of the immune system. Once the immune system has been triggered, even the slightest future exposure can trigger an allergic reaction. An estimated 8% of the adult allergic patients and 20% ‑ 25% of children reportedly suffer from Type I allergic reactions to fungi, which may imply some genetic predisposition. Patients with this predisposition produce immunoglobulin E (IgE) anitbodies in larger amounts than "normal" people. The overstimulated production of these antibodies creates a hyperreaction which induces allergic reactions, such as rhinitis, hay fever or asthma within minutes after exposure.
Type III, also known as "Arhus" reactions, are mediated by IgG and IgM antibodies. The resultant immune complexes initiate different inflammatory responses, which may result in asthma. This condition is frequently referred to as "hypersensitivity pneumonitis" or "extrinsic allergic alveolitis." In this type of reaction, the symptoms may appear approximately 4‑8 hours after exposure, and include a general malaise, flu‑like symptoms, fever and muscle and joint pains. Physical findings can also include signs of severe oxygen deficit and abnormal crackling sounds in the lungs, called "rales." Long‑term exposure can lead to fibrosis of the lung tissue.
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 both the patient and 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.
According to the Field Guide for the Determination of Biological Contamination in Environmental Samples published by the AIHA, 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).
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 gear ("PPG's") should be worn by testing personnel, including disposable Tyvex coveralls with hoods, latex gloves under work gloves, HEPPA respirators and disposable shoe coverings.
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 of 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 1/minute. Small particles are deposited upon this plate, which is subsequently incubated and the resultant colonies identified and enumerated. 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 Burkhard 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 CFU's of fungi found inside can be compared to those found outside.
INTERPRETATION OF RESULTS OF MICROBILOGICAL TESTING
There are no "official" standards or guidelines for fungal or bacterial 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.
Since there are no governmental established guidelines 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.
RECENT MEDICAL RESEARCH ON MOLD
In 1997, the Veterinary Microbiology and Epidemiology Department at the University of Helsinki, in Finland conducted a study on Stachybotrys. The highly toxic and nontoxic spores of this fungi were administered to mice by intranasal injection over a three week period. The mice receiving 1 x 10(5) toxic spores intranasally developed severe inflammatory changes within both bronchioles and alveoli. Hemorrhage was detected in alveoli. The mice that received the non‑toxic spores also developed inflammatory changes in the lungs, but these were milder than those mice that received the toxic spores. ["Effects of intranasal exposure to spores of Stachybotrys atra in mice, Fundamentals of Applied Toxicology, Feb. 1997; 35 (2): 182‑8]
In 1999, a study at Texas Tech Medical Center in Lubbock, Texas pinpointed two fungi as possible causes for sick building syndrome. The finding was called a major step towards uncovering what causes breathing difficulties, headaches, flu‑like symptoms, watering eyes and allergic rhinitis. Researchers analyzed the indoor and outdoor air quality at 48 U.S. school buildings where complaints had been made about air quality and respiratory problems were common. More than half of the school occupants who responded cited increased levels of respiratory infections such as tonsillitis, bronchitis, and even pneumonia. In the complaint areas, two types of fungi, Penicillium and Stachybotrys, were significantly more common in indoor air and building surfaces. A high prevalence of Penicillium molds was found in 25 schools. Stachybotrys mold was found under damp carpets, on walls, and under vinyl wall coverings in 11 schools in areas of high humidity. [ USA Today Magazine, August 1, 1999, section no. 2651, Vol. 128; pg. 13; ISSN: 0161‑7389]
The American Academy of Pediatrics has issued a statement to pediatricians describing molds, their toxic properties, and their potential for causing toxic respiratory problems in infants. [ American Academy of Pediatrics, Pediatrics, 1998; 101: 712‑714] The statement discusses a case‑control study of 10 infants who suffered from acute pulmonary hemorrhage and hemosiderosis that occurred in Cleveland between January 1993 and December 1994. The study compared these 10 infants with 30 age‑matched control infants from the same geographic area. The study revealed that infants with pulmonary hemorrhage were more likely to have resided in homes with major water damage from chronic plumbing leaks or flooding. The quantity of molds, including to toxigenic fungus Stachybotrys, was higher in the homes of infants with pulmonary hemorrhage than in those of the control infants. As a result of this study, the county coroner re‑examined all infant deaths in Cleveland during January 1993 through December 1995 to determine whether pulmonary hemosiderin‑laden macrophages were present in the lung tissue. Postmortem examinations were reviewed for all 172 infants who died during that period, including 117 deaths attributed to sudden infant death syndrome ("SIDS"). Pathologic lung specimens were sectioned, stained with Prussian blue, and screened for the presence of hemosiderin. Hemosiderin‑laden macrophages were abundantly present in the lung tissue of 9 (5%) of the infants. Of these nine, two died from homicide, and one had a recent history of child abuse. The other six deaths may have been misclassified as SIDS, according to the study.
Dr. Dorr Dearborn, PhD, MD, Pediatric Pulmonary Division at Case Western Reserve University, School of Medicine, believes that he is 95% certain that epidemiological evidence supports exposure to Stachybotrys as the cause of death in at least 3 of these cases.
EXPERT TESTIMONY IN MOLD CASES
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 and toxicologists.
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:
- whether the theory has been subjected to peer review or publication;
- whether the theory can be or has been tested;
- whether there is a known, acceptable rate of error, and
- 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 state court 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:
- whether the new scientific method is shown to be reliable;
- whether the witness is qualified as an expert in the field, and
- 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.
In March of 1999, the U.S. Supreme Court made new pronouncements in the area of admissibility of expert testimony at trial. In Kuhmo Tire Co. Ltd, et al., v. Carmichael, et. al. (No. 97‑1709), the court ruled that the factors set forth in Daubert apply to all experts, not just those in medicine, or the broader sciences. The high court urged lower courts to act as the "gatekeepers" in deciding whether to admit expert testimony to exclude "junk science." The court held that the Daubert factors are not all‑inclusive, but are to be flexibly applied in order to insure that the spirit of Rules 702 and 703 of the Federal Rules of Evidence are adhered to in all proceedings where experts are permitted to testify. Based upon this recent decision, it remains to be seen how much emphasis California state courts will put on the Daubert factors in screening admissibility of expert testimony.
DAMAGES RECOVERABLE IN MOLD CASES
The general principle governing the measure of damages in all California tort cases entitles an injured party to recover full compensation for losses proximately caused by a wrongdoer's act or omission. This principle is codified in Civil Code section 3333, which provides, "For the breach of an obligation not arising from contract, the measure of damages, except where otherwise expressly provided by this code, is the amount which will compensate for all the detriment proximately caused thereby, whether it could have been anticipated or not."
The principle codified in section 3333 describes the measure of damages for personal injury, as well as injury to real and personal property. The general rule in construction defect cases is that the proper measure of damages is the diminution of value or the cost to repair, whichever is less. Mozzetti v. City of Brisbane (1977) 67 Cal. App.3d 565. However, in at least one other major case, the court of appeal held that the proper measure of damages in a construction defect case is the cost of remedying the defects, together with the value of lost use during the period of injury, regardless of the theory of liability relied upon by the plaintiff. Ravens Cove Townhomes, Inc. v. Knuppe Developement Co. (1981) 114 Cal. App.3d 783. And at least one case holds that the homeowner can recover the cost to repair, even if it exceeds the diminution of value caused by the defects. Orndorff v. Christiana Community Builders (1990) 217 Cal. App.3d 683. The rule adopted by the court in this case is commonly referred to as the "personal exception" rule, because the court found that the plaintiffs had a personal reason for wanting to repair their home and had no intention on moving. Other cases have held that "there is no fixed, inflexible rule for determining the measure of damages for injury to, or destruction of, property, and whatever formula is most appropriate in the particular case will be adopted." Ferraro v. Southern Calif. Gas Co. (1980) 102 Cal. App.3d 33.
Regarding the personal injury claim arising from toxic mold related illness, damages recoverable include pain and suffering, past, present and future medical care, future medical monitoring, lost wages, and loss of earning capacity. Califonia Jury Instruction, BAJI Nos. 14.10‑14.13. In rare cases where a death has occurred due to fungal or bacterial exposure, a wrongful death claim can be made by the surviving family members for loss of love, companionship, comfort, affection, society, solace or moral support, and any loss of enjoyment of sexual relations or loss of physical assistance to a spouse in the operation or maintenance of the home. Survivors can also recover for lost financial support from the decedent. California Jury Instruction, BAJI Nos. 14.50‑14.52.
Prejudgment interest can also be recovered to compensate the plaintiff for the loss of use of his money or property. Civil Code section 3291.
In California, attorneys fees are generally only recoverable if there is a contractual right to recover them. Frequently, purchase agreements between buyer and seller of real property include an attorney's fees clause. Also, in any action brought to enforce the terms of the CC&R's for a common interest development, the prevailing party is entitled to recover reasonable attorney's fees and costs pursuant to Civil Code section 1354(f).
Punitive damages may be justified in a fungal contamination case when the evidence establishes that the defendant was aware of the probable dangerous consequences of his conduct, and the defendant willfully and deliberately failed to avoid those consequences (e.g., landlord or HOA knows of the presence of toxic mold and fails to remediate the dangerous condition or disclose this material fact to homeowner). Penner v. Falk (1984) 153 Cal. App.3d 858.
Emotional distress damages may also be recoverable in cases involving personal injury or fraud. However, emotional distress damages cannot be recovered where the injury is confined to property damage. In Erlich v. Menezes (1998) 99 C.D.O.S.6808
STATUTE OF LIMITATIONS FOR MOLD CASES
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 Miller v. Lakeside Village Condominium Association, Inc. (1991) 1 Cal. App.4th 1611 that the one (1) year statute of limitations provided by Code of Civil Procedure 340(3) applied 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 after flooding occurred. 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 performed an unsuccessful remediation. The fact that plaintiff's ultimate medical condition was not properly diagnosed for two more years was not persuasive to the court. For the one year period to begin to run, the plaintiff must have been injured and know of the cause of the injury.
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 provided in 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 Miller 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, Tucker v. Baxter Healthcare Corp. (9th Cir. 1998) 158 F.3d 1046; Hopkins v. Dow Corning Corp. (9th Cir. 1994) 33 F.3d 1116. In those cases, the courts have held that when the injury claimed is not commonly associated with a malfunctioning product, the statute of limitations is tolled until the plaintiff suspects or should have suspected the cause of his or her injury. Because the causal connection between fungal contamination and personal injury is not yet common knowledge to the medical or legal 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.
RECENT PUBLISHED VERDICTS & SETTLEMENTS OF MOLD CASES IN CALIFORNIA
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. Also, in larger construction defect cases where an entire homeowners association comprised of several hundred units are suing the builder for defects to the common areas, many times a mold claim is thrown in to trigger insurance coverage for personal injury or loss of use of property. 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, this author recovered $350,000 for a Simi Valley woman 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. [Tri‑Service Reference No. S99‑09‑19; Jan Hickenbottom v. Raquet Club Villa HOA, VCSC case no. SC 020 526].
In May of 1998, the owners of a 7,000 square foot custom home in Playa Del Rey 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. [Confidential Report for Attorneys, CRA No. 10272, 1998 Issue, pg. 12‑54; Doe Homeowners v. Roe Builder.
In February of 1998, three families in Alameda County 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. [Confidential Report for Attorneys, CRA No. 9855; 1988 Issue; pg. 08‑76; Jacqueline Berry, et. al., v. Mission Terrace HOA, et. al., ACSC case no. H‑182260‑5]
In November of 1997, a Rialto 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. [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]
In February of 1997, this author recovered $1,353,000 for the owners of a Malibu beachfront home they had purchased new for $2.5 million from 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 immune‑compromised condition, suffered flu‑like symptoms, sore throat, diarrhea, headaches, fatigue, dermatitis, and general malaise. Plaintiffs' cost to repair home was $662,000. [Confidential Report for Attorneys, CRA No. 8795; 1997 Issue; pg. 10‑53; Doe Homeowners v. Roe Seller, et al.]
RECENT PUBLICIZED MOLD CASES IN OTHER STATES
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 that contained asbestos, toxic mold and lead paint, without any safety equipment or disclosing the presence of these hazardous materials.
In July of 1999, Farmer's Insurance Group was sued by a Texas family for $100 million for failure to settle a flood damage claim, even after Farmer's own repair contractor warned Farmer's that toxic mold could grow in the plywood subfloor and after Texas Tech University's Health Sciences Department found Stachybotrys in the house. [PR Newswire Association, Inc. July 20, 1999, pg. 4919]
In June of 1999, two New York apartment building owners were sued with 125 lawsuits seeking a total of $8 Billion in damages for personal injuries allegedly sustained from exposure to mold and fungi contamination. [Mealey's Litigation Report: Emerging Toxic Torts, Vol.8; Issue 6; June 25, 1999; Ellia Munoz et. al., v. Henry Phipps Plaza South, et. al., N.Y. Sup., N.Y. County case no. 109895/99].
In 1998, Polk County Florida settled claims for defective construction and resulting mold contamination against the general contractor for $13.5 million and against the performance bond sureties for an additional $35 million.
In the largest published verdict of its kind, a $14 Million judgement was recently affirmed by the Florida Court of Appeal against the contractor of the Martin County Courthouse for sick building syndrome and construction defects [Mealey's Litigation Report: Emerging Toxic Torts, Vol. 7, Issue 21; February 5, 1999; Centex-Rooney Construction Co. Inc., et al. v. Martin County, Fla., No. 97-1473, Fla. App., 4th Dist.]. 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.
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, that suggested the existence of a health hazard stemming from the presence of toxic molds in the buildings. The court of appeal held that the county met its burden of proof under Frye v. U.S. (1923) 54 App. D.C. 46, 293 F. 1013 D.C. Cir., noting that both experts testified about numerous publications accepted by the scientific community recognizing the link between toxic mold exposure and adverse health problems. Centex‑Rooney Construction Company Co., et. al. v. Martin County, No. 96‑2537, Fla. App., 4th Dist.