Mold Mania – Builders Problems
An attorney who has defended builders against mold
litigation offers a view from the builder's corner
of the courtroom.
Mold has not gone away. If anything, mold hysteria
has increased in the last year. By some estimates,
more than 15000 mold cases have been filed to date,
and insurers are running scared. Plaintiffs'
attorneys continue to bring both property damage and
personal injury claims, even though science has not
established a cause-and-effect link between toxicity
in humans and exposure to airborne mold. All this
has builders, developers, and others in the housing
industry deeply concerned about their potential
exposure to mold-related claims.
Mold legislation has been proposed at state and
federal levels, but there is little consensus so
far. One such bill is federal H.R. 1268. This
measure offers tax credits (up to $50,000 per
instance) to help cover the repair/remediation of
water- and mold-related property damage. It also
provides funding and protocols to study the effects
on human health, if any, related to exposure to
mold.
Early action
In the meantime, lawsuits against builders and
developers are mounting.
In response, some large home builders have
established procedures and guidelines for mold
remediation.
Smaller builders may not have formal mold
remediation procedures, but they still must fix any
source of water intrusion and immediately repair any
apparent mold damage. Even more important, they all
must learn how to keep the damage from happening in
the first place.
But it's one thing for a builder or developer to
understand these measures--and another to ensure
that subcontractors implement them. Project
supervisors must inspect the work of subcontractors
responsible for areas where water or moisture
problems can occur, notably HVAC systems, window
installation, roof and stucco installation, and
painting and flashing. Even at the framing stage,
common sense must prevail. Studs and other portions
of the frame should be allowed to dry before the
building envelope is sealed.
HVAC system installation and the sealing of ductwork
have been especially troublesome. Improper
installation can lead to condensation in attics, for
example, which in turn can lead to water seeping
down drywall into air return registers, potentially
leading to mold growth. Including provisions in
contracts with subcontractors that hold the
contractor responsible for water and mold problems
related to installation errors or the use of
improper equipment would be worthwhile.
Under attack
Even with such measures in use, however, claims are
rising. One example involves a case where our client
was repairing water intrusion and mold damage in a
home. The builder was within three weeks of
finishing the project when the homeowner hired "mold
counsel." After that, things went downhill. Although
our client agreed to fix all legitimate problems
under warranty, the homeowner, with counsel, began a
judicial and public attack on our client's company.
First, the homeowner filed for breach of contract,
negligence, and personal injury, as well as charges
of conspiracy and violation of the civil RICO
(Racketeer Influenced and Corrupt Organizations)
Act. The homeowner's counsel then placed "notices"
in the local paper, claiming to be looking for
witnesses who could shed light on alleged
development-wide mold problems. Additionally, the
plaintiff's counsel sought and gained local
television coverage. They then filed a complaint
with the state Construction Industry Licensing
Board, alleging shoddy construction and making
personal attacks on the contractor.
Although this is not being handled as a normal
construction defect case, it shows what can happen
if the wrong people are involved in a mold
complaint. Our client will address the legitimate
aspects of the claims. But the more bizarre
allegations and personal attacks, despite their
inaccuracy, can cause negative publicity and
adversely affect our client's business. As a result,
we are evaluating mechanisms for affirmative relief
against the homeowner for such damages.
Mold misperceptions
Unfortunately, attacks such as the one outlined
above and other high-profile mold cases that have
been picked up by the media have been exaggerated,
creating a false sense of urgency with the public.
It is common for mold growth to occur when certain
materials get wet and are not dried out; it also can
be relatively easily repaired.
It is on the so-called "personal injury" side that
the hype is really baseless. Molds are fungi. They
occur naturally, and there are over 100,000
identified species. While there has been a lot of
negative press about "black mold" or "toxic mold,"
mold actually can be a good thing. Yeast is a form
of mold, the flavor of blue cheese is a result of
mold. While excessive mold under certain conditions
may result in allergy-type symptoms in some
sensitive individuals, many other types of natural
airborne particulates, such as pollen, dander, and
pet hair, can cause similar symptoms.
More hype surrounds the subject of mycotoxins, which
can be produced by some fungi or molds, leading some
people to conclude that the mold is toxic. However,
there is simply no peer-reviewed scientific study
that has shown a cause-and-effect relationship
between exposures to airborne "black mold" spores,
or any other kind of mold, and toxicity in humans.
Furthermore, there is no permissible exposure limit
to mold. While plaintiffs' attorneys and some of
their so-called experts continue to make claims of
health effects and personal injuries due to exposure
to mold, proposed federal and state legislation urge
that proper scientific studies are needed to
determine if there even is a causal link between
exposure to mold and an effect on human health. That
is a commendable goal.
Another worthy goal of such legislation would be the
regulation of so-called mold remediators and
experts, who seem to be crawling out of the woodwork
(presumably the moist woodwork) hoping to make their
fortunes by portraying mold as the next asbestos.
Aim for avoidance
Whatever the legitimacy of mold claims, the best
defense is a good offense. The best approach is to
avoid litigation by addressing the homeowner's mold
concerns, particularly legitimate concerns that
appear to be related to a construction defect. Even
when no such link exists, educating the homeowner
about mold, moisture, and routine maintenance may
not be a bad idea. In the final analysis, however,
we can't prevent people from filing baseless claims.
The hope is that ultimately such claims will be
thrown out of court, and that the government will
develop standards and regulations to control and
eliminate frivolous litigation, as well as a
procedure to address legitimate mold concerns.
