Verdicts / Settlements - Plaintiffs

Personal Injury (Non-Vehicular)

Facts

In the mid-1980's the construction of the 70-unit Los Verdes Homeowners Association (HOA), in the city of Coto de Caza, was completed. Plaintiffs are two families who owned and occupied two condominiums. In 1997, the HOA commenced a construction defect lawsuit against the developer and its subcontractors for various defects, including water intrusion. The HOA settled its construction defect lawsuit against the original developer for $5 million in 1999. In early 2000, the HOA settled its claim against the original subcontractors for an additional $2 million. As part of those settlements, the HOA, developer and subcontractors all gave general releases to each other of future and unknown claims. In early 1999, the HOA performed mold investigation following complaints by numerous homeowners of visible mold and mold-related injuries. In February 1999, based upon the recommendation of the HOA, both the Licon and Bristol families were forced to evacuate their homes and were told that mold remediation by the HOA would last only a few weeks. The mold remediation, however, took several months and after seven months, Plaintiffs were informed that it was safe for them to move back into their condos. The Licon family reoccupied their condo in September 2000, but immediately, all eight members of the family experienced acute mold-related injuries. The Licon family evacuated their home for the second and final time in October 2000. The Bristol family never reoccupied their condo believing that it was unsafe to do so. All four members of the Bristol family also experienced mold-related injuries. Both families were displaced from their residences for approximately two years. The Licon Family additionally lost their home to foreclosure.

Plaintiffs sued the HOA, its mold remediation contractors, and the original developer and its subcontractors for their personal injuries and displacement from their homes. They were the first to file. Approximately half of the 70-unit complex has since filed complaints for mold-related injuries against these same Defendants.

The Bristol family additionally sued Constance Sanguinetti and John Sanguinetti, the original owners of their condo, for failure to disclose defective conditions at the time of purchase.

Once the Licon/Bristol Plaintiffs filed their personal injury actions against Defendants on October 17, 1999, Defendants could not cross-complain against each other for indemnity based upon their prior settlements.

Contentions

The Plaintiffs claimed that Plaintiffs suffered severe personal injuries as a result of exposure to toxic mold in their condos resulting from water intrusion from the construction defects. The HOA was negligent in its retention and selection of the mold abatement contractors and industrial hygienists. These Defendants gave "certificates of clearance" certifying that the properties were "safe" to reoccupy after the HOA allegedly performed mold abatement in 2000. The original developer and its subcontractors were responsible for the chronic water intrusion, which led to toxic mold contamination of their condos. The contamination was subsequently not properly remediated by the HOA

Defendants argued that after performing its own destructive testing, the HOA blamed its own mold remediation contractors and industrial hygienists, as well as the original builder and subcontractors, for negligent mold abatement and water intrusion. The mold remediation contractors and industrial hygienists argued that they only did a specific set of work under the guidance of the HOA. The developer and its subcontractors maintained that they paid the HOA to make repairs for all construction defects, including water intrusions.

Injuries

Daily seizures, nausea, chronic headaches, respiratory distress, skin rashes and neurocognitive impairment to members of the Licon family. Episodic vertigo, hair loss, skin rash, respiratory problems, cognitive impairment, loss of concentration and short-term memory loss to members of the Bristol family.

Specials

Medical Costs $20,000 total for the Licon Family, $15,000 total for the Bristol family. Other Loss of use of homes for 2 years.

Negotiations

1st Demand: $2,643,124 from the Licon Family, $1,850,766 from the Bristol family.

1st Offer: None

Settlement

$1,140,250 partial settlement to date; $663,250 to the Licon Family, $477,000 to the Bristol family.

Note

Because the HOA failed to perform a complete mold investigation before it settled its claims against the developer and subcontractors, the HOA was recently forced to pass a special assessment of approximately $50,000 per unit. This is to fund a $3.5 million shortfall from the amount of the settlement to perform mold abatement in the 70 condos

In addition to the settlement payment paid to the Bristols, the HOA agreed to repair and abate the Bristol unit based upon mutually agreed upon remediation protocols.

In a related matter, the HOA has a pending legal malpractice lawsuit against counsel, Silldorf, Shinnich & Duignan, which represented the HOA in the underlying construction defect case.

Plaintiffs continue to prosecute their case against the HOA's two industrial hygiene consultants that issued the 'certificates of clearance' certifying that the properties were "safe' to reoccupy. The case is set for trial in the Spring of 2002.