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2014 Annual Mold Litigation Update: Courts, Medical Professionals Continue to Struggle with Assessment of Mold Claims

May 28, 2015

Every year at this time we look back at the cases, studies and other developments which have impacted mold personal injury litigation over the last twelve months. It has now been more than twelve years since the Ballard case in Texas first focused the media’s attention on mold as the subject of civil litigation. The $32 million dollar jury verdict in that case, based on injuries allegedly caused by a commonly occurring organism, was striking. But like much of what is reported regarding mold claims, the truth was in the details. Ballard was an insurance bad faith case against the plaintiffs’ homeowners’ insurance carrier, not a traditional third party injury lawsuit. Less than two years after the $32 million dollar verdict was reached, a Texas appeals court cut it to $4 million.

We believe that the fact that mold claims continue to be filed (albeit at a decreased volume) more than a decade after Ballard is attributable to a fundamental misunderstanding of the ubiquity of mold in the indoor and outdoor environments and the means by which it can (and cannot) cause injury and illness. Allergy and infection can be caused by molds and fungus, although systemic infections are extremely rare. On the other hand, claims of brain injuries, cancer and other serious conditions allegedly caused by toxicity, resulting from exposure to so-called “toxic” molds, are not supported by medical science.

These distinctions are highlighted in several of the developments reported in this update. Anyone with an interest in real property or who faces a moisture or mold problem should keep these reports, and the lessons they hold, in mind during the coming year.

Federal Judge Cuts Award For Mold Personal Injuries From $1.3 million to $150,000, Offers Guidance on Value of Mold Claims

In March 2013, the United States District Court for the U.S. Virgin Islands issued a detailed slip opinion in the case of Smith v. Katz. The opinion is notable for its conclusions, its handling of expert witness issues and its overview of verdict values in similar matters.

The plaintiff, Lorraine Smith, was a government employee who worked in a building owned by the defendant. Plaintiff claimed that improper construction led to moisture intrusion into the building and, ultimately, “an unusually high amount of mold spores in the air.” The lawsuit claimed that these conditions caused plaintiff to develop asthma and then Chronic Obstructive Pulmonary Disorder (COPD). After a week long trial, the jury returned a verdict of $1,290,000 – $390,000 in economic damages and $900,000 in non-economic damages.

Defendant responded with several post-trial motions, including a motion for a new trial. The Court reviewed the testimony of plaintiff’s liability and medical experts and generally found the bases for their opinions lacking. Plaintiff presented the testimony of a civil engineer on indoor air quality issues. The Court noted that this witness lacked any experience in the life sciences. One of the two physicians called by plaintiff testified that he was “not a mold expert by any means.” Although the second medical expert called was better qualified, the Court still found a lack of evidence correlating the level of plaintiff’s exposure to mold to “the level of mold exposure necessary to produce adverse health effects.”

Despite these problems, the Court refused to overturn the verdict. However, in regard to the amount awarded, a review of similar cases resulted in a conclusion that the damages awarded were excessive. The Court cited four prior mold cases in which verdicts ranged from $16,000 to $140,000. A common theme in the results reviewed by the Smith Court was that the injuries alleged consisted of an exacerbation of existing conditions rather than new injuries or illnesses. This is a notable distinction. Most mold claims involve an exacerbation of existing allergies. Mold is a known allergen.

The District Court found that plaintiff suffered from asthma before she was exposed to mold in the plaintiff’s building. As a result, the Court cut the damages award to $150,000. The extent to which the weakness of the plaintiff’s experts played a role in the Court’s decision to reduce the award seems apparent, although it is left unstated in the opinion. Equally important, this detailed decision demonstrates the relatively low value of most mold claims, even those which have resulted in a plaintiff’s verdict.

“Mold Match” Leads to Settlement in Sick Building Lawsuit

In October 2013, local media reported that a former Florida prosecutor, Stefanie Krathen Ginnis, had settled her claim that mold exposure at the Broward County Courthouse had caused severe sinus problems. The Broward County Commission approved a settlement of $166,500 with the plaintiff, one of 19 current and former county employees to file suit. The plaintiffs alleged that she had been exposed to excessive levels of mold at the county courthouse.

The former prosecutor was the first of the nineteen plaintiffs to settle. Unlike most mold claims, her case was supported by objective evidence. A culture collected from the plaintiff during sinus surgery matched the type of mold found in the Courthouse. Although uncommon, this type of fungal infection is a known disease process. A culture taken from the plaintiff’s sinuses is objective evidence of a fungal infection. Although it doesn’t prove the origin of the mold, when combined with the results of environmental mold testing, it can make for a strong circumstantial case. The evidence in this matter should be compared to that in most mold cases, where there is a lack of any direct evidence that an injury or illness is fungal in nature. In any case based on a claim of infection, objective evidence should be available.

Study: Fungi in Homes Not Associated With Asthma or Other Health Issues in Children

In a study released in September 2013 for publication in the journal Indoor Air, researchers looked at conditions in 400 homes in Sweden. The study population consisted of 202 children with allergies and 198 children in a control group. Dust samples were collected and cultured to measure the level of mold in each home.

The test results were compared to reports of moisture and mold in the homes by parents or inspectors. Also examined were any relationships between the results and the health of the children in the homes, including those with asthma, rhinitis and eczema. After studying the evidence, the researchers reached the following conclusions: (1) The levels of culturable mold in the homes “were not associated with qualitative markers of indoor dampness or mold or indoor humidity;” and (2) “these agents in dust samples were not associated with any health outcomes in the children.”

These results show that by themselves, the results of environmental testing for mold are not indicative of health problems or even a reliable marker for indoor air quality problems.

Occupational Exposure to Mold Leads to $28 Million Verdict in Missouri

In November 2013, a Laclede County (Missouri) jury returned a $28 million verdict in favor of plaintiff Phillip Berger. The plaintiff was a worker at an industrial facility owned by defendant Emerson Climate Technologies. According to the plaintiff, the failure of a ventilator in his workplace caused a vapor cloud to form and he was sickened by contaminants in the vapor.

Doctors diagnosed the plaintiff with hypersensitivity pneumonitis, a serious pulmonary disorder, and testified that it was caused by mold and bacteria in the vapor. Exposure to high levels of fungi, such as might occur in an industrial setting, are a potential cause of hypersensitivity pneumonitis.

The award included $23 million in punitive damages. The jury was apparently persuaded by plaintiff’s characterization of himself as a “blue collar guinea pig.” A short-lived change in Missouri’s worker’s compensation laws allowed plaintiff to sue his own employer for civil damages. The defendant is planning an appeal. Although this claim arose in a context distinct from most mold personal injury claims and involved exposures in addition to mold, it demonstrates the potential value that a case based solely on pulmonary injury can have in front of a jury.

California Jury Returns Defense Verdict After Nine Week Mold Trial

In May 2013, after almost nine weeks of trial in the Santa Barbara County Superior Court, a jury returned a 12-0 verdict in favor of the defendants. Plaintiff Inger Budke, was a property manager for the Santa Barbara County Housing Authority and lived in an apartment in one of the agency’s facilities. The lawsuit alleged that the Housing Authority failed to properly maintain the property, resulting in increased moisture levels, mold growth and the presence of other contaminants. Plaintiffs moved out of the apartment for six months because of these issues.

Plaintiffs claimed that the alleged contamination caused a wide range of heath problems, including severe asthma and allergies in one daughter and neurological issues and cognitive deficits in another. Defendants filed a series of motions challenging the scope of the alleged injuries and after a week of pre-trial hearings, the Court dismissed all claims of neurological, developmental and psychological injury. Plaintiffs asked the jury for an award of $1.2 million. Instead, the jurors found that plaintiffs failed to prove that they had been harmed by conditions in their apartment.

This case is notable for its result, the length of the trial and the willingness of the defendants to devote the resources necessary to demonstrate that the plaintiffs were not harmed by residential mold exposure. We are also proud to note that the defendants in this action were represented at trial and throughout the litigation by Victoria Ersoff, a partner in the Los Angeles office of Wood, Smith, Henning & Berman.

Mold in the News: One Year After Superstorm Sandy, Hospital Continues To Screen For Mold Injuries

In recent years, the aftermath of large storms such as Hurricane Katrina and Superstorm Sandy have included concerns regarding the health effects of mold caused by water damage and increased indoor humidity levels. In New Jersey, the Deborah Heart and Lung Center obtained a $650,000 grant to screen survivors of Superstorm Sandy for mold related respiratory injuries in an effort called the Respiratory Evaluation of Sandy Program.

According to information released by the Hospital, more than 885 individuals have been screened to date. As of November 2013, approximately 15 percent of participants have been identified as having some type of respiratory issue. The most commonly found problem: An exacerbation of existing allergies or asthma. The Hospital stated that a primary benefit of the program was the reassurance it offered to individuals who thought they might have a lung problem due to mold.

Wood, Smith, Henning & Berman’s mold defense practice is nationally known. We have tried more mold personal injury claims to verdict than any other law firm.

Our practice includes the defense of mold claims at both trial and arbitration, pre-litigation counseling, including the supervision and review of abatement and remediation projects, and consulting on mold personal injury, water and property damage issues across the country. We hope that this summary of the trends and developments of the past year helps prepare our clients and friends for what lies ahead. If you would like more information on any of the subjects mentioned in this update, or our practice in general, please feel free to contact us.

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