X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Mold has been called the “next asbestos” for trial lawyers. Thousands of cases have been filed. Headlines about large sums paid to celebrity litigants have attracted wide attention. But even some of the winning lawyers warn that, for the inexperienced, diving into mold litigation can be treacherous. Lawyers can do worse than lose. They can be sued. Mold cases often require expertise in medicine, house construction, industrial hygiene and insurance, lawyers said. They are frequently time-consuming and expensive to work up. Because the science is hotly debated, causation is difficult to prove. Alexander Robertson IV has been litigating mold cases since 1995. In May, he secured a $7.2 million settlement for television personality Ed McMahon, who claimed that mold had damaged his Beverly Hills mansion, made him and his wife sick and killed his dog. Robertson of Robertson & Vick in Calabasas, Calif., is concerned about some of the lawyers and consultants attracted by the publicity. The ones who tried to “jump on the bandwagon,” he said, “did as much harm to mold litigation as anything. “I have no doubt that mold is here to stay,” he said. “I don’t think it’s the flavor of the month.” Neither does he doubt that spurious claims have been filed. And, since mold consultants are unlicensed, almost anyone can claim to be an expert. “In the state of California,” he said, “you have to have a license to cut someone’s hair, but you don’t have to have a license to tell someone to burn down their house because it’s infested with mold. Go figure.” TAKING A CASE When taking a case, a lawyer should design the investigation and remediation from the outset, Robertson said. “If you don’t, you can spread contamination” by opening walls and exposing mold before establishing containment. Lawyers and consultants have been sued as a result, he said. Several lawyers who are experienced in this area voiced similar concerns. “I’ve seen lawyers unfamiliar with mold and environmental issues hire consultants who are untrained and issuing unreliable reports, and the lawyers not knowing the difference,” said Daniel Sitomer, whose firm, New York’s Sitomer & Hogan, specializes in mold litigation and represents both plaintiffs and defendants. John Miller, a solo practitioner in Sacramento, Calif., said that about 20 percent of his clients in mold cases were previously represented by lawyers who didn’t know what they were doing — real estate lawyers, for example, who knew little about mold, construction defect or bodily injury. “As a plaintiffs’ lawyer, you need to know everything,” said Miller, who won a $2.7 million verdict in 2001. “If you don’t, you’re going to get killed. That’s what’s unique about these cases.” Stephen Henning, a defense lawyer at Los Angeles’ Wood Smith Henning & Berman, which represented a defendant in the McMahon case, said he’s seen “second-generation suits” brought against lawyers and remediation contractors who failed to perform proper repairs. Incompetence is not the only reason lawyers are sued in this relatively new field. Sometimes, lawyers contend, it has more to do with being in the wrong place at the wrong time. Sean Sherlock, a lawyer in the Irvine, Calif., office of Phoenix-based Snell & Wilmer, defended industrial hygiene consultants from ERM-West caught up in protracted litigation involving a 72-unit condominium complex called the Los Verdes Homeowners Association in Coto de Caza, Calif. It began as a relatively straightforward construction defect case, Sherlock said. “The attitude in this world,” said Sherlock, referring to this type of litigation, “is to reach out and sue anyone you can. And that attitude seems to have infected the mold litigation. A lot of people who were sued never should have been sued.” Several lawyers, including those who represent plaintiffs, agreed that a shotgun strategy is common in construction defect cases. In 1998, the homeowners association sued the developer, general contactor and several subcontractors for various defects, including water intrusion. Though mold was discovered during this litigation, it wasn’t a central issue. Over the two years that followed, the association settled the suits and brought in remediators and subcontractors to fix the damage. As the original lawsuit was winding down, however, the mold problem was heating up. Homeowners began complaining, and the association recommended that two families move out while mold was removed from their units. The process dragged on for months, and it wasn’t until September 2000 that they were informed it was safe to return. One family did and allegedly suffered mold-related injuries that caused them to leave after a month. The second family never went back. Both families hired Robertson and sued the homeowners’ association, the mold remediators and the original developer and subcontractors. The case isn’t over. To date, his clients have settled for a total of more than $1 million, Robertson said. Licon v. Los Verdes Homeowners Association, nos. 815494 and 815492. The homeowners’ association, in turn, filed cross-complaints against nearly everyone, Sherlock said. His clients were sued on implied equitable indemnity, but that can only be asserted among joint tortfeasors. The case was dismissed, he said, because his clients owed no duty of care to the families. Howard Silldorf, who represented the association in the original lawsuit, later was sued himself — despite excellent results, Silldorf said. When all was said and done, his firm (now San Diego’s Silldorf & Shinnick) managed to secure $5.65 million in settlements for Los Verdes. In most construction defect cases, the recovery is less than $20,000 per unit; Los Verdes recovered more than $78,000 per unit, he said. Yet he had to file a motion on the pleadings from the association’s lawsuit against another lawyer to get the case dismissed. Insurance companies in these cases are always looking for deep pockets, he said, so they go after everyone. Even though the case didn’t go anywhere, his firm still had to pay to defend itself. Edward Susolik of Callahan & Blaine in Santa Ana, Calif., litigation and insurance coverage counsel for the homeowners’ association, responded that the professionals the volunteer board hired to resolve the problems share responsibility for the damages. Terms of his client’s settlement with ERM-West are confidential. THE WEAKEST LINK Authoritative statistics on mold-related lawsuits could not be found, but mold accounts for about $2.5 billion a year in insurance claims, according to P.J. Crowley, spokesman for the Insurance Information Institute. Its data show the majority are from Texas, with many more in California, Florida and Arizona, and the numbers have risen sharply since 2000. In “Toxic Mold Litigation,” a new book published by the American Bar Association, editor and co-author Raymund King weighs the strengths and weaknesses of these cases. Addressing plaintiffs’ lawyers, he writes: “[Y]our weakest evidence will usually be on causation.” The reason is the absence of consensus in the scientific community on the health risks posed by mold. Molds are microscopic fungi that require only moisture, heat and food to grow and are frequently found in humid environments. They grow outdoors and indoors, where drywall, sheetrock and wood provide all the nutrients they need. In homes damaged by water, like McMahon’s, which suffered a burst pipe, mold can grow and spread within 48 hours. Relatively few of an estimated 100,000 mold species produce the so-called mycotoxins that threaten health. “Stachybotrys chartarum” (also called “Stachybotrys atra”) is a green-black strain most often linked to illness. “Did [Stachybotrys chartarum] suddenly evolve to become a man-killing fungus?” King asks in his book. “[A]uthors suggest that molds have proliferated � because newer buildings tend to be more tightly sealed and ventilated, heated, and air-conditioned with duct systems that facilitate the buildup of pollutants.” The consensus seems to be that mold can cause health problems. A guide published by the U.S. Environmental Protection Agency says, “Inhaling or touching mold or mold spores may cause allergic reactions in sensitive individuals.” Symptoms may include skin rash, an asthma attack or a cold. Some suits have included controversial claims that mold caused brain damage or cancer. The one that has garnered the most attention is Ballard v. Fire Ins. Exchange (Travis Co., Texas, Dist. Ct.), in which a jury awarded the family of Melinda Ballard $32 million. An appellate court slashed the verdict to $4 million, which Ballard is appealing. Prominently featured in news stories was the allegation that mold caused her husband’s memory loss. As insurance coverage specialist Randy Maniloff pointed out, however, the verdict was not awarded for bodily injury. In fact, he said, the trial judge excluded Ballard’s medical experts. (Similarly, even though the death of McMahon’s dog is mentioned in virtually every article, the claim was dismissed before the case settled.) A partner at Philadelphia’s Christie, Pabarue, Mortensen and Young, Maniloff has written in several articles that mold is not the next asbestos. He believes insurers will be able to exclude mold from their coverage, as they have already begun to do, and the injury claims don’t have the lengthy latency period that has allowed asbestos lawyers to circumvent exclusions by implicating old policies. But that doesn’t mean he’s not worried. Ballard’s case was decided on a bad-faith insurance claim. “I’ve never seen a better fact situation for bringing a bad-faith claim than mold,” he said. The insurer has to decide how the mold got there — whether it was the fault of the policyholder. And no matter what a claims adjuster decides, Maniloff said, someone else can make a reasonable argument he was wrong. “The worry,” he said, “is that this could be the next Ballard case. It presents the insurance company with an unlimited — or an unpredictable-downside.” Experienced plaintiffs’ lawyers like Robertson and Miller choose their cases carefully. Robertson estimated that 20 percent of his cases allege insurance bad faith. He steers clear of cases where the science is hotly disputed, like cognitive impairment and cancer claims. His injury claims are mostly allergies and asthma. These days he opts for larger cases, he said. Single-family lawsuits can take just as much time as the bigger ones. And, he adds, perhaps as a word of caution: “You can get in trouble real quick.”

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.