News Archive
Will ‘Toxic Mold' Be the Next Asbestos?
Claims for personal injury and property damage caused by mold growing inside buildings are on the rise, plaintiffs' lawyers and insurance defense attorneys tell Lawyers Weekly USA, and some experts predict they will be the next big tort wave.
"It is a trend. It's one of the hottest areas in construction defect as well as toxic tort law. I view these mold claims as similar to asbestos 30 years ago," says Alexander Robertson , a Los Angeles plaintiffs' lawyers who is currently representing over a thousand plaintiffs against hundreds of building owners for mold contamination.
Injuries from mold range from respiratory problems, skin rashes and headaches to lung disease, cognitive memory loss and brain damage, experts say.
"Mold is everywhere. There are no specific government guidelines and not a whole lot of medical information on it. It's ripe for lawyers to get into and expand it," says Sara Thorpe, a San Francisco defense lawyer.
"Anytime you have some water penetration [in a building], you have potential for mold - and a lot of potential for litigation," says David Governo, a Boston toxic tort defense lawyer.
Claims include:
- property damage and personal injury claims against insurers;
- construction defect claims against builders, contractors and architects;
- personal injury claims against building owners and managers;
- workers' comp claims against employers.
What Is Toxic Mold?
Molds occur naturally in the environment, and are necessary for us to live.
But some types of molds produce toxins and don't normally occur in concentrated amounts indoors. These varieties, such as aspirgillus, penicillium, stachybotrys and arimonium, are water-loving, and experts generally agree that excessive growth of these types are harmful.
But "there's debate over how toxic mold is and how much is too much," says Dr. Eckardt Johanning of the Eastern New York Occupational and Environmental Health Center in Albany, N.Y., who has written a book on measuring mold exposure.
"It depends on how susceptible people are and how long they were exposed," he adds.
In order to grow, mold needs water, warmth and a food source.
A leaky roof, burst pipe or other recurring water penetration into a building often provides a moist area and because buildings are sealed so tightly for energy efficiency, the area never dries up.
Cellulose-based sheet rock, gypsum and other standard building materials provide a nutrient "smorgasbord" for mold to grow, says Steven Goldman, a New York plaintiffs' attorney who represents 500 tenants suing two New York apartment complexes for mold contamination.
Many common building techniques such as using vinyl siding on the interior side of an exterior wall can prevent moisture from drying, experts say.
"This is a classic problem. The vinyl is impermeable to moisture so if any water vapor comes through the exterior wall, it hits that wallpaper and condenses because it can't pass through. You get significant mold growth and it's not uncommon to find the back of the wallpaper covered in black mold," says John Kominsky, an indoor air quality expert in Cincinnati.
The mold problem is often exacerbated by tearing down a wall, because the mold becomes airborne.
Some varieties, such as stachybotrys, are heavier than air and tend to settle on surfaces.
"This is a big danger. If you take out a wall with stachybotrys, now you've disseminated tens of thousands of spores. They settle on a chair, a child sits on the chair and they become respirable," explains Steven Goselin, a certified indoor environmentalist in Cambridge, Mass.
In his state, a school and a city hall annex recently shut down because of mold.
Several lawsuits alleging mold contamination in schools have been filed around the country.
Lawyers say mold contamination claims were virtually unheard of a few years ago.
But scientific and medical knowledge of the toxic effects of mold is expanding and people are becoming more aware of indoor air quality issues, experts say.
More companies are offering testing for indoor contaminants.
"Three years ago, I had never heard of mold. Now it's about 50% of my business," says Goselin.
Once mold is airborne, remediation can be extensive and costly, similar to asbestos removal, he adds.
"It has to be done under containment. The guys are suited up and remove the contaminated materials," he says.
There are no federal guidelines for cleaning up mold.
According to Goselin, the most widely recognized standards followed by the industry are the New York City guidelines. No other jurisdiction has published guidelines.
Personal Injury Claims
Plaintiffs are pursuing negligence claims against building owners and managers for not maintaining the property and defective design or workmanship claims against construction companies, architects and contractors, such as roofers, plumbers or waterproofers.
In some states, such as California and Nevada, homebuilders and subcontractors are strictly liable for injuries caused by construction defects, says Robertson .
Tenants are also suing landlords for breach of implied warranty of habitability and for housing code violations.
Employees in mold-contaminated workplaces can sue in court and avoid exclusivity provisions of workers' comp statutes in some states if they can show that the employer knew of the problem but concealed it or didn't repair it, notes Robertson , who adds that employees may also pursue a direct action against the contractors.
Defense arguments have focused on analyzing the possible causes of the mold.
"Who caused the mold and how did it get there? Was it the initial construction, bad design or an intervening influence? Did it leak on its own? If it leaked, why did it leak: Did a pipe break or was it poorly maintained?" says Governo.
Medical causation is the other big defense argument, and plaintiffs' lawyers say this is the most important criterion for screening cases.
"The first thing I always look at is medical causation. That's the bottom line," says Robert Trainor, a plaintiffs' lawyer in Covington, Ky., who represents a hotel employee in a mold case.
Plaintiffs' lawyers agree that medical causation can be difficult to prove because unlike other toxic substances, there are no standards on how much mold is too much.
"There are no federal, state or local standards anywhere in the country that establish a permissible exposure limit," says Robertson .
In addition, the symptoms can be subjective and different people react differently to mold.
"You may find mold, but the symptoms are amorphous. These are common everyday symptoms that may be subjective," says Goldman.
In cases involving many plaintiffs in a multi-unit building, another defense argument is to make each plaintiff prove causation for every apartment or office separately, says Maloney.
Morris predicts that defense lawyers will use Daubert and Frye to exclude expert testimony on the medical symptoms related to mold exposure.
Few cases have gotten to the appellate level, but in one case, a Florida appeals court upheld an $11 million verdict against a Frye challenge to the experts. Centex-Rooney Constr. Co. v. Martin County, 706 So.2d 20 (Fla. App. 4th Dist. 1997).
Line Up the Experts
Toxic mold claims require a lot of experts which can make the cases expensive, plaintiffs' lawyers say. They add that most of these cases are being brought by 10-15 lawyer firms.
Small firm lawyers should consider teaming up with larger firms willing to front the cost, suggests Raymond Boucher, a Beverly Hills, Calif., plaintiffs' attorney who recently settled a case for several million dollars involving eight families in federally-funded housing with mold contamination.
"It's not uncommon for the costs to reach a quarter of a million dollars to pay for experts," he adds.
On the environmental side, environmental specialists such as industrial hygienists or toxicologists are needed to test for mold by gathering samples and sending them to a microbiological lab to determine which species of mold are present.
On the construction side, experts include engineers and "people in the construction field who can talk about the level of water penetration and whether it's coming from the air conditioning or poor pointing or brick work," says Paul Maloney, a plaintiffs' personal injury lawyer in New York.
The case may also require a remediation contractor to testify about how to remove the mold and how much it will cost, notes Robertson.
On the medical side, depending on the injuries, experts range from environmental medicine doctors to ear, nose and throat experts to a pulmonary doctor if the case involves asthma to an oncologist for cancer claims or a neurologist for brain damage claims.
Maloney has also brought in epidemiologists to show that children in a certain building had a higher asthma rate than the national average.
Insurance Claims
Mold is being closely monitored on insurers' radar screens.
"It's an emerging issue. There has been an increase in claims recently, and it's an issue that I don't think can be swept under the table or ignored," says Alejandra Soto, a spokesperson for the Insurance Information Institute in New York.
The Defense Research Institute recently set up a new litigation group to deal with mold and indoor air quality claims.
"Mold and fungus are hot issues. I've seen a lot more of these cases in the past year," says H. Patrick Morris, a Chicago attorney who chairs DRI's toxic tort and environmental law committee.
Insurers are facing first and third party property damage claims and personal injury claims.
In one of the few appellate cases on this issue, the Texas Court of Appeals ruled that even though a homeowners' policy excluded losses caused by mold, a couple could recover for mold damage resulting from water that collected in a crawl space because of a leaky roof, because it was an "ensuing loss caused by … water damage." Home Insurance Co. v. McClain, No. 05-97-01479-CV (Texas Court of Appeals, 5th District, Feb. 10, 2000).
Generally, insurance carriers argue that mold is a "problem of upkeep by the owner," and therefore isn't covered, says Soto.
In addition, standard homeowners' insurance doesn't cover faulty design, so the owner would have to recover from the construction company or contractor, says Robert Hartwig, chief economist for the Insurance Information Institute.
"The biggest issue is what caused the loss. Is the cause itself covered or not covered? If it's covered we pay for it, if not we don't," says Warren Farrar, assistant vice president of general claims at State Farm Insurance.
But some plaintiffs' lawyers are suing for bad faith, claiming that mold was allowed to spread because an insurer only paid to "Band Aid" a moisture problem, according to Fred Hagans, a Houston attorney who is handling about a dozen cases involving this issue.
Many carriers are now writing mold exclusions into homeowners' policies, says Robertson .
Eventually carriers will offer new policies specifically to cover mold, predicts Soto.
However, third party claims have been more successful because courts have generally held that a "pollution" exclusion doesn't apply to mold, lawyers say.
This is because most policies define pollution as substances brought or dumped onto the property, and mold is naturally occurring, says Robertson .
But coverage may also depend on how the policy defines "occurrence," because the claim usually involves recurrent or continuous water penetration, notes Susan Hickman, a Chicago toxic exposure defense attorney.
"These are factual disputes such as 'Is it one occurrence? Was it a continuous leak? Or did you have a series of leaks?'" she says.
Here are some recent cases involving toxic mold:
California
The employees of a newspaper are suing the landlord for $10 million in damages for failing to make repairs that allowed several types of mold to grow which they claim caused lung and sinus infections. JJ Acquisition Corp. v. Pacific Gulf Properties, No. 00AS05036 (Superior Court, Sacramento County, September 15, 2000).
A condo association is suing real estate developers, contractors and managers for personal injury and property damage caused by inadequate waterproofing that permitted toxic mold to grow. McCulloch Townhomes Assoc. v. USC Real Estate Development Corp., No. BC 220-405 (Superior Court, Los Angeles County, Nov. 18, 1999).
A Superior Court judge and court employees are suing the county for failing to repair a leaky air conditioner unit that caused a "black, slimy mold" to colonize in her courtroom resulting in severe rashes, respiratory problems, dizziness and abdominal pains. Krant v. County of Tulare, No. 00-0190367 (Superior Court, Tulare County, March 27, 2000).
A community association is suing builders and developers of a condo complex for construction defects that allowed mold to grow on walls and ceilings, resulting in rashes, nosebleeds and coughing. Spectrum Community Assoc. v. Bristol House Partnership, No. 00CC07398 (Superior Court, Orange County, June 21, 2000).
Delaware
Last year, a jury awarded over $1 million to two tenants of an apartment complex for medical injuries caused by toxic mold. The case is on appeal to the state supreme court. Stroot v. New Haverford Partnership, No. 95C-05-074-HLA (Superior Court, New Castle County, May 11, 1999).
Illinois
Parents of elementary school children are suing the school district for negligence and violation of the school code for not taking care of flooding that resulted in mold. Andrejevic v. Board of Education of Wheaton-Warrenville School District, No. 99L-00671 (Circuit Court, DuPage County, July 9, 1999).
New York
Five hundred plaintiffs are suing the owners and managers of two apartment complexes for mold contamination. Munoz v. Henry Phipps Plaza South, No. 109895 (Supreme Court, N.Y. County, 1999).
The plaintiffs are also suing the property insurer for bad faith in denying coverage. Davis v. Zurich American Insurance Group, No. 103223 (Supreme Court, N.Y. County, Feb. 23, 2000).
Ohio
A manager of a Best Western is suing the hotel owners under an intentional tort theory for the lung ailments he developed after he cleaned up the hotel's toxic mold problem. Crane v. Bank of America, No. A0001819 (Court of Common Pleas, Hamilton County, March 24, 2000).
The plaintiff also intervened as a third-party plaintiff under a negligence theory in a case by the owners against the hotel construction company. Dalespring Corp. v. Bullington-Gleason, No. A9902592 (Court of Common Pleas, Hamilton County, May 7, 1999).
Texas
A couple is suing their insurer alleging that it delayed paying for a plumbing leak resulting in toxic mold that forced the family to leave the contaminated house. Ballard v. Fire Insurance Exchange, No. 99-05252 (District Court, Travis County, May 5, 1999).
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