2013 Annual Mold Litigation Update: Volume Of Cases Declines, Plaintiffs Score Some Victories

Each year at this time we prepare an update for our clients and colleagues, summarizing the trends in mold personal injury litigation from the past twelve months. This year, although the number of reported verdicts throughout the country appeared to decline, the news, case results and appellate decisions which did occur favored plaintiffs. One possible explanation is that Plaintiff’s attorneys rarely solicit these claims anymore. As a result, only the “good” cases get filed and reported.

Anyone with an interest in real property who faces a moisture or mold problem should keep these reports in mind. The potential for liability still exists and when mold and water problems are not handled properly, significant damages can result. Our goal, as always, is to keep our clients out of the news.

New York Appellate Decision Reopens The Door For Landlord Liability In Mold Cases 

(Cornell v. 360 W. 51st St. Realty, LLC, 939 N.Y.S.2d 434 (2012))

In March 2012, a New York appellate court held that the hotly debated ruling in Fraser v. 301-52 Townhouse Corp., 870 N.Y.S.2d 266 (2008) did not bar a party from pursuing a personal injury claim based on exposure to “toxic” mold. Prior to Cornell, it was generally presumed that Fraser had effectively barred attempts to prove causation under the Frye test in mold cases, at least in New York. The Frye test requires that claims of injury which must be proven by expert testimony be based on generally accepted scientific principles. In Fraser, the Court effectively concluded that the Plaintiff could not show that his injury was caused by mold exposure because the theory that mold caused such injuries was not generally accepted.

But Cornell holds otherwise and allowed a plaintiff to proceed against a defendant landlord in a mold personal injury case. The lesson is simple. Attacking causation will have to be done on a case-by-case basis, not based solely on appellate authority holding that causation cannot be proven in any mold exposure case.

CALIFORNIA DEPARTMENT OF HEALTH RELEASES PUBLIC STATEMENT DECLARING MOLD “UNHEALTHY”

In September 2011, the California Department of Health released a public notice entitled Statement on Building Dampness, Mold and Health, which concludes that the presence of “water damage, dampness, visible mold, or mold odor in schools, workplaces, residences, and other indoor environments is unhealthy.” The state agency acknowledged that “PELs (personal exposure limits) remain elusive” and there continues to be no clear state or federal policy regarding how to assess the health risks to building occupants posed by mold.

Nevertheless, the Department of Health relied on a “consensus among scientists and medical experts” to support its position that the presence of visible water damage, damp materials, visible mold, or mold odor in buildings indicates an increased risk of respiratory disease for occupants. The statement cited known health risks resulting from mold exposure, including the development of asthma, allergies and respiratory disease, increased wheezing, coughing and difficulty breathing. The Department relied largely on reports issued by the World Health Organization, the Institute of Medicine in Washington, D.C. and the U.S. Environmental Protection Agency for support. We expect plaintiffs and their experts to cite the Department of Health’s statement in future mold personal injury cases.

RECENT ALLERGY STUDY CONCLUDES INFANTS EXPOSED TO SPECIFIC TYPES OF MOLD HAVE HIGHER ASTHMA RISK

 

In August 2012, researchers from the University of Cincinnati published a new study in The Journal of Allergy and Clinical Immunology concluding that exposure to three species of mold common to water-damaged buildings in infancy was associated with childhood asthma. The researchers collected samples from nearly 300 homes and adjusted their results for other commonly-known risk factors for asthma. The study concluded that there is a statistically significant increase in asthma risk at age seven associated with high mold levels in a child’s home during infancy. This study should be kept in mind whenever water damage occurs in buildings occupied by children.

HURRICANE SANDY PRESENTS SIGNIFICANT MOLD ISSUES

 

Nearly one month after Hurricane Sandy devastated much of the northeastern United States, politicians, including Representative Jerrold Nadler (D-NY), urged the Environmental Protection Agency and FEMA to oversee comprehensive testing of homes in the area to ensure they are habitable. News organizations, including the Associated Press and the Wall Street Journal, predicted that “uncounted numbers of families” would return to coastal homes contaminated with mold. The expected rise in respiratory problems due to mold and moisture was predicted to mirror those which occurred following Hurricane Katrina. Many residents of the Gulf Coast complained of a “Katrina cough,” following the hurricane, a condition blamed on exposure to mold and dust. Our experience is that press coverage following these incidents focuses the public on mold and water damage issues, boosting the number of claims, even those unrelated to the current natural disaster.

CELEBRITY MOLD VERDICT: FORMER LAKERS AND ROCKETS COACH ORDERED TO PAY OVER $3 MILLION

 (Bardack v. Tomjanovich, Los Angeles County Superior Court Case No. SC10185)

In October 2012, former NBA player and coach Rudy Tomjanovich and his wife were ordered by a Los Angeles County Superior Court to pay over $2.7 million in compensatory damages and $250,000 in punitive damages. Plaintiff had purchased the Tomjanovich’s Pacific Palisades home in 2007 and alleged that they failed to disclose the existence of water leaks and mold in the residence during the sales transaction. The couple claimed that they only observed the existence of water leaks once while living in the residence and remedied the condition shortly thereafter. They also claimed that they did not read the disclosure documents they were required to fill out during the sale of the home because they assumed the documents would be reviewed by their attorneys.

There are several lessons from this verdict. One is that the presence of mold can change an ordinary property damage or real estate case into one that elicits juror sympathy, boosting damages and verdict value. Second, anyone who owns real property where water damage occurs, plaintiff or defendant, must be careful to disclose that damage and all remediation efforts in every future sale of the property.

NON-CELEBRITY MOLD VERDICT: TENANT OBTAINS SIX FIGURE VERDICT AGAINST LANDLORD

 (Cohen v. Fox Management, Inc., Multnomah County Circuit Court Case No. 1010-1453)

On December 9, 2011, an Oregon jury returned a verdict of $103,000, plus attorneys’ fees, against a property management company. The plaintiff, a radiologist, had rented a home managed by the defendant. When a water leak occurred in a stairwell, plaintiff advised the defendant property management company. Despite the complaint, no repairs were made and a strong musty odor developed. Plaintiff allegedly developed eye irritation, headaches and allergy symptoms. Eventually the tenant hired an indoor air quality expert who found multiple building defects and excessive indoor humidity levels. Plaintiff was forced to move from the house and either dispose of personal property or have it professionally cleaned.

What is notable about this verdict is that it does not involve celebrities, breathless references to “toxic” black mold or claims of brain damage or death due to exposure to fungi. It is a straightforward case involving water damage which resulted in mold growth and subsequent respiratory symptoms and other relatively minor ailments. Water and moisture problems can and often do lead to mold growth. Mold is a common allergen and can cause temporal irritation to those exposed to it. The important message for landlords, property management companies and others with an interest in real estate is to address water issues before they lead to mold growth. That will prevent future verdicts, big or small.

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.