News Archive
Breaking The Mold
An industrial hygienist discovered toxic spore contamination in a Sacramento commercial building. Now two -- Pillsbury lawyers want the property's landlord to clean up its act.
Nightmare on Tribute Street
For years, Kathy Masera and her staff at the California Job Journal in Sacramento had lived with a leaky roof and plumbing problems. But by the end of 1999, those seemingly innocent troubles had festered, becoming something much more serious. Mold-spore exposure had reached toxic levels. Nearly all of Masera's employees were suffering health problems. An environmental hazard crew removed the mold and decontaminated the building, but since then the landlord has made no further attempt to remediate the property. The plight of Masera and her staff put them among a growing number of people living with sick buildings. While a number of attorneys have experience dealing with the growing practice of mold law, combining landlord-tenant, insurance and environmental law, the state's laws offer little protection to occupants and scarce guidance to landlords. Now, Masera is left to figure out who is responsible for her losses. Interestingly, the landlord may not be liable for the damage because no law exists in California requiring landlords to remedy mold growth.
Those who were disappointed that the end of the world didn't arrive with the dawn of the new millennium should have been in Sacramento.
There, Kathy Masera was living through a Hollywood tale that seemed to cross "Ghostbusters" with "Aliens."
For years, she and her staff at California Job Journal had lived with a leaky roof and plumbing problems. By the end of 1999, those seemingly innocent troubles had festered, becoming an entirely more noxious issue.
Mold-spore exposure had reached toxic levels at the Journal. Since Thanksgiving, nearly all of Masera's employees had experienced health problems. An environmental hazard crew came in to remove the mold and decontaminate the building at 1800 Tribute Road.
And Masera and her employees had to evacuate their 6,500-square- foot space immediately. The building's only other tenant is an adoption agency, which was not evacuated because it doesn't have any full-time employees .
The plight of Masera and her employees made them one of a growing number of people living with sick buildings - and considering tort claims because of mold, fungus, bacteria, pesticides, carbon dioxide and other biological agents that impair indoor air quality and create significant health risks to humans.
While a number of attorneys have experience dealing with the growing practice of mold law, combining landlord-tenant, insurance and environmental law, the state's laws themselves offer little protection to occupants and scarce guidance to landlords.
Masera had complained to the property manager for years since the company moved in in 1992, but the problems never seemed to get fixed. Every winter, the office sprung leaks, and summers went by without repairs. On Thanksgiving weekend, a plumbing pipe burst, soaking the bathroom and surrounding carpet, which began to emit a foul odor causing employees to gag. An out- of- order sign went on the bathroom door after employees experienced burning eyes and skin when entering.
After a slow start - the landlord did not call in a plumber over Thanksgiving so the water stagnated over the weekend - Pacific Gulf Properties Inc. seemed to cooperate.
During the ensuing weeks, 26 of the Journal's 30 employees called in sick with health problems, including spontaneous nose bleeds, intestinal pain, diarrhea, migraine-level headaches, nausea, skin rashes and various flu-like symptoms. Masera herself has been hospitalized from two lung infections in the past year.
By mid-December, Masera knew more was afoot than just a bad flu season. After some referrals, she called in industrial hygienist Mark Pheatt. Pheatt, who ran his own company, Atlantic Pacific Environmental, had been investigating bacteria threats in the workplace for nearly 30 years. Pheatt came in and scraped samples from the carpets, walls and acoustic ceilings, then sent them off to a laboratory for analysis.
What he discovered was shocking. Mold colonies were growing in hidden places: under carpets, on the back side of bathroom walls and in the attic. And, according to lab results obtained by Pheatt from Areotech Laboratories in Phoenix, Masera's employees were under attack from seven different molds, including aspergillus niger, cladosporium and penicillium at 2,200 times normal exposure levels.
On Dec. 28, Masera, Pacific Gulf Properties' property manager and Kim Worl, a scientist with Radian International, met to review lab results and discuss remediation. Worl agreed with Pheatt's recommendation that the Journal evacuate the building as soon as possible - within 48 hours -and the landlord agreed.
"The scientists both read the lab results from Areotech and concurred that the office space was infected with mycotoxin spewing molds, some of which were 2,200 times the levels found in the outside air," Masera says. "We had to pack up and move immediately."
So, while the rest of the world was popping champagne corks, Masera and her management team were fleeing spewing mold spores. They moved their entire business operations, including books, papers and equipment, into space offered by PGP in an adjacent building . Necessary items went through a decontamination process, a chamber set up and operated by Sacramento's SpaceCon environmental hazards crew. Most of the company's furniture had to remain behind for further decontamination.
The situation soured quickly, however. Two months after the move, Masera discovered that the second building also had a leaky roof despite representations she says she received from PGP to the contrary.
Masera and Pheatt specifically questioned the property manager about any history of roof leaks in the second building and received assurances that it had no substantive leaky roof problems and that minor roof leaks had been repaired.
However, when heavy rains hit the building in late January, Masera and her employees found themselves putting buckets on the floor to catch rainwater.
"The damages with us took on a whole different level when we found contamination in the second location," Masera says. "We've been victimized twice."
Masera, who now is relocating to a new office complex not managed by PGP, has not yet assessed all her damages from the mold contamination, though she believes it is well into the hundreds of thousands of dollars.
She has lost most of her office furniture and all plants, acoustical panel and chairs from the first building exposure and spent thousands of dollars in medical and sick-leave costs. Five of her employees, who did not want to suffer further exposure to mold contamination, quit.
Now, Masera must get her business back on its feet and figure out who is responsible for her losses. What's remarkable is that PGP may not be liable for the damage because no law exists in California requiring landlords to remedy the mold growth.
"No government agency is responsible for this," Masera says. "There are no laws on the books specifically addressing mold."
That, at least, was Masera's conclusion after she called every government agency in Sacramento to find out what legal redress she had. Every agency turned her away, including the California Occupational Safety and Health Standards Board.
Masera recalls feeling stunned, disbelieving that no laws protected her from the mold infestation that caused havoc to the Journal. Masera says Cal Osha refused to come to the site, saying it had no jurisdiction over mold.
She got the same response from the California Environmental Protection Agency and its Air Resource Board. The state's Department of Health Services referred her to its Web site on household mold cleaning, but the information was very basic and not helpful.
Finally, the city building inspection department came to look at the water intrusion issues.
"They cannot force a landlord to remediate mold," Masera says, " because the word mold does not appear in the California Uniform Building Code Act."
The city of Sacramento came out and red-tagged the building on five code violation technicalities, including lack of building permits and use of substandard roofing materials, according to the red tag still posted on the building.
"We spend 90 percent of our time indoors, but we have no air quality requirements for indoor air quality," Masera says. "I thinks that's a travesty."
When state agencies failed to help her, Masera turned to Michael A. Kvarme of San Francisco's Pillsbury Madison & Sutro, a real estate attorney specializing in landlord-tenant matters.
Initially, he thought he was taking on a simple landlord-tenant dispute.
"There was a period of time where there was some additional activity to try to negotiate and work something out," Pillsbury litigation attorney Greg L. Johnson of the Sacramento office says. "Then there came a point when Kvarme concluded that his contribution to the effort was exhausted. At that point, it was more or less a pure litigation situation or potential litigation situation."
The Pillsbury lawyers then met with Masera and her partners to determine a course of action.
"We then contacted the landlord's in-house counsel to meet with them and try to get the situation resolved," Pillsbury's Wesley C.J. Ehlers says.
Masera had only one telephone conversation with PGP's in-house counsel, Dick Cobb, and the corporate vice president of industrial properties, Robert Dewey, who voiced concern and agreed to meet with Masera and pay for Pheatt's work. However, according to Masera, PGP subsequently canceled three scheduled meetings . Representatives of the company, she says, have refused to meet with her.
"Pacific Gulf Properties continues to meaningfully and appropriately address all issues raised by this tenant," PGP's counsel, Preston W. Brooks of Los Angeles' Cox, Castle & Nicholson, says. "Obviously, we strongly disagree with the allegations made by this tenant concerning this matter, which are grossly exaggerated and mischaracterize the facts.
"However, it's a policy of PGP to refrain from providing specific responses in the media to allegations that are the subject of a pending landlord- tenant dispute."
PGP representatives were not willing to discuss any further aspects of this case. And whether any other tenants have complained of mold problems is unknown.
Masera, meanwhile, had hoped to clean up the spores and move back in to her old building. Just before the Thanksgiving spewing, Masera renewed her lease for another five-year term. She liked the office's configuration, had decorated extensively and the location was good for business.
Even after the mold infestation, Masera says she simply wanted PGP to clean the space to Pheatt's specifications. He recommended removing the carpet, discarding all soft, upholstered furniture, and using a three-stage decontamination procedure involving fungicide wipe and HEPA (high efficiency particular air filtration) vacuuming of all goods.
"At the front end, there was full expectation that [California Job Journal] would get right back in, and it was just a matter of addressing the contamination issues so that the building was safe to go back into," Pillsbury's Johnson says.
To date, however, PGP has made no further attempt to remediate the property, which sits in the same condition as it has since the SpaceCon crew finished its initial decontamination, according to Masera. And, with no law requiring landlords to prevent recurring risks of mold contamination, whether PGP will do anything to remedy the problem at its buildings is unclear.
That seems a little unfair to Masera, since PGP is far from a mom-and-pop operation. PGP is an equity real estate investment trust (REIT) based in Newport Beach that owns, develops and manages industrial and multi family properties in the Western United States. It controls 12.8 million square feet of industrial properties and 3,069 multi family units with about half of the residential units dedicated to senior citizens. PGP's 1999 gross revenues were about $124 million with a net operating income of $93 million, according to its Web site.
Pillsbury attorneys still hope they can reach a resolution for Masera without going to court. She wants an in-person meeting to discuss possible settlement in order to avoid protracted litigation, and she wants to recover her costs.
"I want to be made whole," Masera says. "And now, I would like to see laws introduced in this state so that other people are not victimized to the same degree as we were."
Because no one has filed litigation , the outcome for Masera and the building is unclear. Originally, Masera wanted the office space to be decontaminated so that she could return to it. That was before she found out that the second building also had a leaking roof and similar mold problems despite PGP property management representations to the contrary, according to Masera.
"We still haven't put a lot of final thought into what the causes of action may be because the present posture of the dispute is that we're still talking," Johnson says.
Pillsbury's attorneys recognize the difficulties inherent in cases such as Masera's, which must rely on the analysis of individual scientists as to what is safe and acceptable because of the lack of standard measures for the level of mold causing harm to humans.
"The issue is standards of care on health issues," Johnson says. "Without a definitive standard, we are left to deal with duty, negligence and disclosure issues in conjunction with what the scientist wants done. It's a complicated situation."
"We are dealing with bedrock principals of law," Ehlers adds. "This issue did not exist 10 years ago, and we are applying old law to new scenarios ... what is reasonable, safe and not conceal material information ... to do what society expects. And that changes."
Masera and PGP continue to dispute her losses. Masera's insurance company has agreed to replace damaged furniture caused by the broken plumbing pipe, although not on grounds of mold contamination.
"As science gets better with more understanding, the law tends to catch up," Johnson adds. "This represents a unique situation because there are not set standards. We rely on scientists to tell us what is safe, acceptable and prudent.
"The client needs a safe environment for her employees where they can feel they are not being exposed to things that cause health problems."
Following up on Masera's work, Pillsbury attorneys have tried to identify a government agency that deals with mold problems in buildings. They have found no governmental agency - not Cal OSHA (Occupational Safety and Health Standards Board), California's Environmental Protection Agency, the county health department or city building code enforcement offices - that would take jurisdiction or point to another as having jurisdiction over this matter, according to Johnson and Ehlers.
"No one would look at this building and say it's too dangerous because of mold," Johnson says.
They couldn't. No law regulates mold in buildings. No laws cover toxic mold remediation in any local, state or federal jurisdiction or indoor air quality, only guidelines on ventilation.
The American Society of Heating, Refrigerating and Air-Conditioning Engineers develops standards through consensus of its 55,000 professional members. It has been developing indoor air quality policy recommendations and expects to release them shortly. ASHRAE standards are used in the building industry and often in lawsuits to establish standards of care.
"The landlord has to provide a certain standard of care, and that's a question of evidence for a lawyer," Hal Levin, an ASHRAE research architect and engineer- scientist based in San Jose, says.
Individual cases depend on factors such as the type of organism, the extent of the contamination, the kill-all viability (how the contamination can be eradicated), and whether there are isolate spores, Levin says. However, dead spores can still contaminate.
"The general wisdom when having to deal with extensive disposal of materials is to throw everything away," Levin says. "But the landlord may also try to get out cheaper than replacement and try spot cleaning."
It depends on what the landlord's expert recommends, Levin says. The landlord must exercise due diligence and hire an expert to investigate.
In Masera's case, PGP hired an environmental expert from Radian International. Johnson and Ehlers say that PGP has indicated their scientist disputes the decontamination measures necessary, especially on the soft goods, but they say Pillsbury never has received any documentation from PGP.
"My advice to the landlord would be to play it safe," Levin says. "Cal OSHA requires protections for workers in nonindustrial buildings. You have to operate a building the way it was designed."
Ripping out Sheetrock walls that are mold factories, tearing out carpet, and replacing roofs create no small expense, and insurance companies may not want to pay for such costs. But such measures may be necessary to address recurring mold infestation.
PGP's insurance carriers are Fireman's Fund, which insures building contents, and Lexington Insurance, which covers the building itself. Although Fireman's Fund has investigated the damages for PGP, it has not issued a copy of its inspection to Masera.
Addressing the health problems is even more difficult because mold exposure affects everyone differently because everyone's immune system is different.
The frequency of medical cases has increased over the past few years according to Dr. Peter Yip, chief of occupational medicine at Kaiser Medical Center in Sacramento. He has been dealing with mold exposure cases for about 10 years and treated a couple of Masera's employees.
"The symptoms usually involve mucus membrane irritation and upper respiratory infections," Dr. Yip says. "There are two ways mold effects people: irritation and allergic reactions.
"Some people have a background or a genetic history and could potentially develop allergy to mold and be more susceptible. The irritation reactions are temporary, and after removal of the problem the effects taper off and go away."
At least one attorney disputes the fact that molds cause only temporary harm. Construction defect attorney Alexander Robertson of Los Angeles-based Knopfler and Robertson , who has handled more than 200 toxic mold cases in California since 1994, says he has seen chronic problems and even two deaths attributable to lung infections caused by the aspergillus mold.
"It's nothing to be messing around with," Robertson says.
Robertson is representing Superior Court Judge Elisabeth Krant and about 30 others who have filed an action against Tulare County alleging that moldy chambers in the courthouse have caused them to suffer severe skin rashes and burning in their eyes (see today's Daily Journal).
Yip bases his opinion on available scientific literature and his own clinical experience, which involves treatment of 20 to 30 people for occupational air quality complaints over the last decade.
"In my literature search, as well as clinical experience, part of the reaction is stress because people are concerned about this kind of exposure," Yip says. "I haven't seen any literature about neurological response to mold exposure.
"There have been reports of intestinal symptoms such as diarrhea and nausea. I'm not sure of exact mechanisms that cause this, whether it's direct irritant or stress. It should be a very temporary reaction, not chronic. Chronic illness to a person is not explainable from a mold standpoint. But it could be chronic to the building."
Yip could not discuss specifics of any harm suffered by employees of the California Job Journal, but he did observe that many building owners have failed to see the whole picture.
"They fix the leak but ignore the fiberware," he says. "That is, they fail to control the recurrence of moisture build up and continued mold growth."
Masera, meanwhile, is seeking to heighten the visibility of mold. The California Job Journal, distributed to about 50,000 readers, lists Northern California employment opportunities and offers editorial content. In April, the Journal published a three-part story on toxic mold in the workplace, chronicling her story, to raise the awareness of employers and employees.
"I decided we couldn't just stay silent," she says. "Somebody had to say something. I realized, as a journalist, the only way we could create an interest about what had happened to us was that I had to chronicle the story. I had to raise the issue of the public health threat."
Until the state legislature implements laws and grants enforcement powers to a government agency to deal with mold and other indoor air quality health risks, tenants' only redress will be in state court. As it stands now, landlords do not have to get rid of chronic problems in buildings or to give notice to tenants that such problems exist.
"We must have legislative authority to require action," Lawrence Washington-Brooks, the manager of code enforcement for the planning and community development department in Sacramento, says.
He has a list of 900 complaints about mold problems in Sacramento from just October to April. "You don't have to see the mold on the wall to take some kind of action," he says.
"Lawyers need to understand that this is a serious problem, that mold can have an adverse impact on people," Pillsbury's Johnson says. "Landlords may be cultivating hazards to [a tenant's] employees. It's not just a matter of water dripping down a bathroom wall or a leaking roof."