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Hurricanes and $22.6 Million Settlement Put Focus on Mold
This fall’s hurricanes in the Gulf Coast, Texas and Florida and a record settlement in a single-family home case where the owners claimed that mold caused personal injuries, including brain damage to their son, have returned the mold issue to the forefront.
Public hysteria over this issue has been fading and the news media has been providing more balanced information about mold. For example, a recent report by MSNBC.com was headlined, "Existence of toxic mold syndrome questioned — Researchers say most symptoms can be explained by other illnesses."
 In October, in response to expectations that massive mold contamination would occur in buildings flooded during the hurricanes, particularly in New Orleans, the Centers for Disease Control and Prevention (CDC) issued “Prevention Strategies and Possible Health Effects in the Aftermath of Hurricanes Katrina and Rita.”
Recommended reading for the housing industry in all parts of the country, the comprehensive CDC report provides information on how to limit exposure to mold and how to identify and prevent mold-related health effects, including up-to-date information on assessing exposure, cleanup and prevention, personal protective equipment, health effects and public health strategies and recommendations.
“The best way to get rid of mold growth is to remove it from materials that can be effectively cleaned and to discard materials that cannot be cleaned or are physically damaged beyond use,” the CDC advises.
On mold-related health concerns, the report notes that, “If left undisturbed, mold is generally not a significant health hazard for most people, and moderate exposure to mold will not adversely affect them.” Further, the CDC says that, “Sampling for mold is not part of a routine building assessment. In most cases appropriate decisions concerning remediation and need for personal protection equipment (PPE) can be made solely on the basis of visual inspection.”
A Cautionary Tale in California
While arguably an aberration, the California case provides a cautionary tale and a reminder to builders and remodelers to be vigilant when dealing with moisture-related issues.
According to published reports, the settlement totaled $22.6 million, including $13 million from a lumberyard after the trial had progressed for six weeks, and just under $10 million from 16 other defendants prior to the trial.
The case involved the owner of a custom built-home who claimed that mold contamination in the house had caused property damage and personal injuries. The owner claimed that his son, who was born three months after the family moved into the home, suffered developmental delays, including generalized brain injury.
During the trial, the owner argued that the lumber company used lumber that was contaminated with mold, which in turn contaminated the entire house. The lumber company argued that there was no evidence of mold in the lumber delivered to the construction site.
The judge reportedly allowed the home owner to present to the jury all of his "evidence" of alleged neurological injury, or "organic brain disorder" resulting from mold exposure, while precluding several lumber company experts from testifying, a possible reason for a decision to settle. Mold cases almost always involve competing experts, and parties who have been able to successfully defend themselves in these cases have typically prevented the jury from hearing certain evidence of mold-related injuries or used experts to dispute its validity.
Of concern to the housing industry is that the size of the settlement might encourage some new mold litigation or embolden counsel in some current cases, although nobody knows what verdict the jury would have reached had it deliberated. Moreover, more courts than not have been excluding mold evidence. Nonetheless, whether a case is settled or is tried, it can be costly and builders and remodelers should focus on what they can do on the front-end to minimize potential liability.
For more information, “Builder’s Guide to Handling Mold Claims and Litigation” and “A Multifamily Owner’s and Manager’s Guide to Handling Mold Claims and Litigation” are available to NAHB members.
Or e-mail David Jaffe at NAHB, or call him at 800-368-5242 x8317.
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