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Contracts and Claims
Timely articles covering the most
pressing issues facing construction firms in the Midwest
Breaking the Mold:
Are These Lawsuits Really Necessary?
J. Nick Badgerow and
Kelly A. Campbell
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Spencer Fane Britt & Browne LLP
 I. MOLD CLAIMS ARE ERUPTING.
Newspapers, television news, and web news reports have all
included stories on “mold” in houses and other buildings. Owners
sue builders for damages resulting from the alleged infiltration
of water or moisture into the building, and for the resulting
damages and personal injuries claimed to have resulted from mold
attributed to that water infiltration. In many instances, the
owners look back on their medical histories for the several
years before the claim, and argue that those problems were the
result of mold.
This phenomenon did not arise on its own, or overnight. This
proliferation of lawsuits is not the result of any developing
hard scientific evidence connecting injuries and health problems
with mold. Rather, it is the result of sensational publicity
surrounding a few high-profile cases, aided by a few
self-proclaimed “experts” who sell their services and opinions.
II. PUBLICITY MAKES THE MOLD.
Many of us have heard about mold claims. One couple in Texas
purchased an 11,500 square foot house and nanny’s quarters,
located on a large estate in Dripping Springs. After mold was
discovered in their house, these homeowners (the Ballards) filed
suit and received a verdict of $32 million against their
homeowners insurance company, although that amount was later
reduced to $4 million.
In another Texas case, a jury awarded $1 million in August 2004
to tenants of an apartment complex, on claims that the landlord
had hidden and denied the existence of mold in the apartments
rented by the plaintiffs.
In Texas alone, the Ballard case spawned a drastic increase in
the number of mold lawsuits filed in the state. Reports indicate
that $2.6 billion was paid on mold claims in Texas during the
year 2001. There was an increase of more than 1300% in the
number of mold claims asserted during that year alone.
Another publicly discussed case was filed by Erin Brockovich,
the now-famous paralegal whose litigation success is portrayed
in her movie. Ms Brockovich had spent $1 million of her bonus
money from the litigation to purchase a one million dollar house
outside Los Angeles. According to Brockovich, however, the house
became infested with mold, causing Brockovich and her family to
become ill. This led to a 48 Hours news report with national
network exposure. According to news reports, Ms. Brockovich
recently settled her case against the builder and homeowner’s
association.
Even Ed McMahon came knocking on the courthouse door, claiming
that incompetent remediation contractors increased his exposure
to mold in his family home.
Of course, it was the publicity surrounding these claims which
has generated public fervor over the issue. One such report was
aired on the ABC News
program, “20-20,” and was titled “Is Hidden Mold at Home Making
You Sick?” This program showed families burdened with physical
and cognitive impairments attributed to mold in their houses.
Even though scientists uniformly agree that there is mold
everywhere around us, the publicity from these lawsuits would
lead one to conclude that any number of health problems suffered
by a few people are the result of that mold which we all breathe
every day, and that everyone will get sick and have the basis
for a lawsuit against someone.
III. “EXPERTS” AID THE PARADE.
In most courts and in many kinds of cases, one needs an expert
witness to testify to the scientific evidence which supports the
plaintiff’s claims. One major function of the trial judge is to
allow into evidence only that testimony which is supported by
scientific knowledge and based on generally accepted principles.
Thus appears the new “expert” in mold and mold remediation.
First, a mold expert examines the building and takes samples of
air, wallboard, and physical items in the building, as well as
dirt and other objects outside it. That expert performs tests on
the samples (for which there are no industry standards), and
then concludes that the samples reflect high concentrations of
those particular molds which are claimed to be deleterious to
human health.
Second, a mold “remediator” enters the picture, to remove and
destroy everything in the house thought to contain mold, and
then replacing the components which have been removed, keeping
track of the costs for damage computations.
There is no consensus standard on how mold inspectors or
remediators perform their job. There are also no standards for
how much concentration of particular kinds of mold will affect
humans.
One group even offers an on-line study course for mold
inspectors. For the price of $1,000, an applicant may take the
on-line course, be given a an exam, followed by a telephone
quiz, after which the organization sends out a “Mold Inspector
Badge” and certificate suitable for framing.
And even if actual mold is found in unusual quantities, there is
little scientific medical support for the contention that mold
causes lung injuries, cognitive
impairments, emotional distress, and other problems often
claimed by plaintiffs.
IV. CONCLUSION – BE PROACTIVE.
Builders need to be aware of the proliferation of claims
involving mold. Then, armed with that awareness, the builder
should be responsive to claims of leaking or moisture in their
buildings. You should get to the site right away, and photograph
what can be seen. Investigate and examine the areas where water
may have infiltrated. Keep safe any components, such as wall
units, doors, windows, or other areas where water is claimed to
be leaking – or where it is apparently leaking. Look for signs
of mold. Be responsive to the issue, and be proactive in
investigating.
In this way, early response can make the difference between a
satisfied customer and a long, expensive lawsuit.
J. Nick Badgerow and
Kelly A. Campbell
practice law with the
Litigation and Dispute Resolution Group at Spencer Fane Britt &
Browne LLP, a law firm with offices in Kansas City, Overland
Park, St. Louis, and Omaha. They can be reached at (816)
474-8100 or (913) 345-8100.
1 “Mold: A Health Alert,” USA Weekend, December 5, 1999,
available online at http://www.usaweekend.com/99_issues/991205/991205mold.html.
2“An Insidious Mold,” CBS News 48 Hours, September 28, 2000,
available online at http://www.cbsnews.com/stories/2000/03/02/48hours/main167069.shtml?CMP=ILC-SearchStories
3“Appeals Court Cuts Verdict Against Insurer Over Mold in Home,”
New York Times, December 20, 2002, available online at http://www.mold.ph/mold_lawsuit.htm
4“More Mold Lawsuits Could Be Coming,” Galveston County Daily
News, August 4, 2004, available online at http://www.imakenews.com/pureaircontrols/e_article000287883.cfm
5“Mold In Texas,” Texas Coalition for Affordable Insurance
Solutions, available online at http://www.tcais.org/insurance/mold_default.php
See also, “Texas Mold Facts,” by the same publisher, at http://www.tcais.org/insurance/mold_facts.php
6“Silent Killers: Toxic Mold,” CBS News 48 Hours, July 26, 2002,
available online at http://www.cbsnews.com/stories/2001/09/05/48hours/main309720.shtml?CMP=ILC-SearchStories
7“Activist Erin Brockovich Settles Home Mold Suit,” Daily News
September 16, 2003, available online at http://www.highbeam.com/library/doc0.asp?docid=1G1:107814985&refid=
ink_puballtnews&skeyword=&teaser=
8“Settlement of Ed McMahon Mold Lawsuit Now at $7 million,”
Courtroom News, May 7, 2003, available online at http://www.eletra.com/pureaircontrols/e_article000154071.cfm
9 “Forget Plastics: The Future is Mold,” The Wall Street
Journal, February 12, 2004, available on line at http://www.schoolmold.com/Toxic-Mold-News/future-in-mold.htm
10“Forget Plastics: The Future is Mold,” supra.
http://www.certifiedmoldinspectors.com/certification.htm
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