The Sun Country Connection
April 15, 2006
 

Mold: A New Four-Letter Word?

David E.C. Gettis, The Roth Law Firm

Due to extensive publicity, the discovery of mold in the home or office sometimes causes panicked reactions more fitting for an ebola outbreak. Recent science indicates that the scare is over-hyped. Mold can be hazardous for immune-compromised individuals, but poses no major threat to healthy people. Nonetheless, the popular perception that mold is dangerous is probably here to stay. Mold problems have become more prevalent in recent decades, partly due to the advent of energy-efficient, tightly sealed buildings that often allow water vapor buildup.

Complicated and Costly

Mold is a dirty word to real estate investors and the construction industry also, but for different reasons. Mold litigation, particularly when personal injury allegations are involved, is intrinsically expensive and complex. There are several reasons for this:

1. It is expert-intensive, with few established standards to guide the collection, quantification, and interpretation of data, or even the qualifications of the experts themselves;

2. Causation, i.e., the linking of particular health problems of particular individuals to mold, and then to particular causes of the mold, can be complicated;

3. There are at least eight different legal theories that may be utilized to assert mold claims, many of which involve differing standards of proof, defenses, elements, and damages, and many of which may be used in the same case;

4. Many parties are often involved, including developers, general contractors, subcontractors, architects, engineers, materials suppliers, manufacturers, brokers, HOA’s, tenants, and landlords; and

5. Complex insurance issues are commonly involved, and because of the “continuous trigger” rule, each defendant often has multiple carriers involved, some or all of which may be contesting liability. Some carriers have attempted to apply the  “pollution exclusion” to mold claims; it is unclear if that interpretation will be broadly successful.

 The Science of Mold (Or Lack Thereof)

Mold is a fungus that performs an essential function in our ecosystem—breaking down dead organic matter. Hundreds of thousands of species have been identified. Mold spores are always present in the outside air. Because of that prevalence, mold is certain to grow where there is sustained moisture in an enclosed area. If left unchecked, mold can damage wall surfaces, carpets, and eventually structures.

Aspiration of mold can cause harm to humans, but recent studies have been unable to link mold to serious illness or injury in otherwise healthy individuals. That fact does not stop plaintiffs or their attorneys and experts from claiming in the courts, sometimes successfully, that serious health problems are caused by mold. There are four categories of health problems associated with mold:

Allergy: Approximately 5-6% of the population is allergic to mold, but allergic symptoms are generally minor.

Infection: Systemic infection of healthy individuals is rare, but mold can cause athlete’s foot or nail fungus. People with compromised immune systems can, however, suffer systemic infection.

Toxicity: Certain molds, in certain conditions, produce toxins known as mycotoxins. But no peer-reviewed study has found aspiration of mycotoxins from mold in a building to be harmful.

Irritation: Mold may cause temporary irritation of the eyes and mucous membranes.

Even though there is a demonstrable link between mold and some health issues, there are no standards articulating what level of mold exposure is harmful. Generally, mold testing experts simply compare the indoor and outdoor levels and types of molds. It is because of the lack of standards and the high cost of testing that the California Department of Health does not recommend mold testing as a mandatory first step after mold is discovered. Rather, attempts should be made to determine the extent of the mold growth and contain and destroy it, if possible. But if the problem is widespread and litigation is anticipated, early testing may be advisable.

The Legal Framework of Mold Litigation

Mold claims may be predicated upon strict liability (which does not require a showing of “fault” and is generally permitted only against the developer and/or general contractor), nuisance, negligence, breach of express warranty, breach of implied warranty, breach of contract, products liability, and fraud. Although the elements of each cause of action differ, the following elements are common to all: (1) water intrusion (2) resulting in mold (3) causing (4) damage to building, contents, or occupants.

Different statutes of limitation are involved for different causes of action. Thus, there is no clear cut-off time for mold-related liability.

Before suit may be filed against construction defendants for property damage, the law requires that they be notified of the problem and given an opportunity to repair it. (This does not apply to claims for personal injury.) Before suit may be filed by a HOA against construction defendants, the HOA must provide the defendants with the information the HOA has about the problem and must engage in alternative dispute resolution.

Multiple defendants are typically involved in mold litigation, whether sued by the plaintiff or brought in to the case via cross-complaint by other defendants. If a defendant has contractual indemnity from a third party, it is extremely important to follow contractual procedures, such as by giving timely notice, allowing for participation, etc.
 

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