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Mold claims were promoted by some as the
next “asbestos
litigation,” where mass mold personal injury and property
damage claims were going to proliferate and consume the entire
building and property management industry, even in Michigan. There are many reasons why the luster of mold claims has somewhat dulled for personal injury trial lawyers and why the predicted epidemic has not come to fruition in Michigan. 1. First, the scientific and medical evidence has not supported claims that mold causes many of the serious and permanent illnesses originally claimed. Whereas, asbestos is widely recognized as causing serious, disabling, progressive and fatal illnesses like mesothelioma, lung cancer and asbestosis, mold typically only causes temporary aggravation of allergies and asthma in sensitive persons and also typically, the symptoms go away when the person is removed from the mold contaminated environment. Further, most symptoms of mold exposure are common to a number of other conditions and/or could be caused by a number of other factors. This makes mold personal injury damage claims more questionable and less valuable. 2. Second, there are no well accepted industry, governmental, or scientific standards as to what level of what type of thousands of species or genera of mold is harmful. This makes it difficult to qualify expert opinions under Daubert principles now adopted in Michigan, and prove that a certain level of mold contamination caused a Plaintiff’s illness . Under the Michigan case, Gilbert v. Daimler Corporation, the trial court, in its role as gatekeeper, must ensure that the expert testimony presented pursuant to MRE 702 is reliable regardless of whether or not the testimony is based on a “novel” science. The so-called mold experts will not be allowed to testify as to the dangers of toxic mold, without a clear scientific link between mold and human disease. The question of the hour will be, “Did the specific toxin in question cause the claimant’s actual injury?” 3. It is expensive to adequately test a home or building for airborne and surface molds of all types. Some tests are needed for certain types of mold but do not do well in detecting or quantifying other types of mold. Different sampling and testing methods apply to determine whether and to what extent surfaces are contaminated as opposed to air contamination. Since exposure to airborne levels of mold is most relevant for health issues and surface mold levels cannot readily be converted to airborne levels, this puts a premium on airborne testing results. ; 4. Mold personal injury class actions have been difficult to maintain due to great differences in individual exposures and causes of the contamination. Class actions help Plaintiff attorneys group together large numbers of claimants to pursue huge dollar verdicts and fees; 5. Since mold is ubiquitous in our world, it is often difficult to distinguish between ambient conditions in our environment and elevated levels due to an undesirable indoor source. It is also often difficult to identify the source and onset of mold contamination in older buildings with a history of leaks, water damage or moisture problems; 6. Michigan’s climate is not as conducive to mold claims as other warm, humid locales; 7. Michigan’s tort reform legislation and rules of admission of expert testimony, have made it more difficult to successfully prosecute such claims in Michigan. As for the last item, under Michigan law, a Defendant is only liable in tort for personal injury or property damage claims for its own share or percentage of fault as compared to all other parties (including Plaintiffs) and non-parties whose fault or negligence may have contributed to the water damage and any resulting mold problem. Before Michigan’s Tort Reform Legislation, one Defendant could be held liable for all of the damages even if it was only one percent at fault compared to others. Since, in mold contamination cases, there are often a number of causes for water damage and intrusion, a Defendant can reduce its share of fault and make recovery by the Plaintiff of full damages more uncertain. Similarly, rules have been enacted in Michigan and through federal case law making it harder for Plaintiffs to use junk science or experts who rely on junk science for unfounded opinions. In fact, a recent decision dismissing a mold injury claim suggested that misgivings about causation evidence are prevalent in Michigan. While, these barriers have dissuaded some Plaintiff attorneys from suing for mold induced personal injuries of their clients, the barriers to sue for property damage and remediation claims are not as high. As a result, we see a shift in emphasis in litigation to property damage and remediation claims. This is so for a number of reasons: 1. The criteria for establishing contamination sufficient to justify remediation are less restrictive than for personal injury claims. There is no requirement that the mold actually have caused any personal injury. Surface contamination is usually sufficient for a claim, and the type of mold is not as crucial ; 2. Although there are still many differences of opinion as to
the needed scope of remediation, there are industry and governmental
guidelines available to help a party or expert develop an accepted
testing and remediation plan . The cost of remediation still can
be substantial, even exceeding the value of the home in some cases; 4. Some homeowner insurers are aggressively pursuing subrogation claims against building industry members when they are required to pay out large remediation claims after covered water damage events. Even, where mold contamination has not yet developed, the fear of mold and expensive mold remediation claims have increased the cost of repair and remediation for water damage claims paid by insurers as they are pressured by homeowners to remove and replace items that may otherwise have been cleaned or dried out. To be sure, there are also defenses and barriers to mold property damage and remediation claims. A home presents itself as a complex and dynamic system. Frequently a thorough investigation into a home’s history will show other water damage or moisture events, or causes of the claimed mold problem, other than the work performed by the party being sued. The scope of remediation and its costs can be reduced by a fair and reasonable evaluation of the property that does not assume that everything must be removed and replaced as opposed to cleaned or repaired. In addition to the continued viability of certain mold related claims, builders, property managers, and other construction related businesses may have difficulty getting insurance coverage that will not exclude mold claims or severely limit available coverage or limits. Many insurers have rewritten their policies to exclude mold coverage. In fact, as of December 2002, 35 states have adopted an approved Insurance Services Office (ISO) mold limitation for homeowners coverage, which allows insurers to exclude coverage for loss caused by mold and wet or dry rot, unless the conditions result from a covered peril. The lack of insurance coverage for homeowners and renters will cause them to look elsewhere for compensation for losses, such as to builders, architects, engineers and property managers. Suits involving mold problems can become very expensive for the contractor, if coverage is excluded or denied by its insurer and can significantly impact the bottom line. Defense costs for counsel and litigation expenses can be as high or higher than the amount ultimately paid to settle a case, or if tried, the verdict. Even a total victory can end up costing tens of thousands of dollars just for experts. In addition, disputes with insurers can result in separate insurance coverage litigation over whether or to what extent mold claims are covered. This involves more legal fees. All these legal fees are usually not recoverable, even if the contractor wins. CONCLUSION AND PRACTICE POINTERS Treat mold claims seriously, but do not panic. It is important to address them aggressively and pro-actively and that does not mean to simply deny the claim and wait until suit is filed. Early intervention where there has been demonstrated water intrusion or moisture damage is important. Significant mold growth can begin within 24-48 hours on building materials. It is better to resolve a minor water damage claim early even if your responsibility is questionable than to delay and allow a large mold contamination claim to develop. Conduct a thorough inspection of the situation by competent and knowledgeable persons to identify the cause of water intrusion, leaks or moisture, and stop the source. It is also very important to find out about any historical water damage or intrusion events to determine other potential causes and responsible parties. Wet or contaminated surfaces and materials need to be quickly evaluated by qualified persons to determine if they can be dried, cleaned or repaired, or whether they need to be removed and replaced. Mold contaminated surfaces need to be evaluated and remediated by qualified and certified personnel using proper procedures including where needed, isolation and negative pressure enclosures. Many mold claims involve assertions that a party cross-contaminated other parts of the home or contents by failing to conduct remediation activities properly or timely. Extensive testing to identify the type, concentration, and location of mold may not be necessary for remediation purposes but may be important for litigation purposes. A carefully thought out plan should be developed with your counsel, and experts as to whether and to what extent testing should be performed. Consider faster and less expensive (than litigation) alternative dispute resolution methods to resolve disputes before they become lawsuits either with the claimant or with other potential Defendants. Mediation, Facilitation or Arbitration are some viable ADR options. Once suit is filed, an aggressive defense with appropriate scientific, medical, and remediation experts should be conducted. Provizer & Phillips has been providing
litigation and consulting legal services on mold, construction
and professional liability matters for over 25 years. If you
have questions or need assistance you can contact us at 1-800-288-9080,
(248) 642-0444; info@p-ppc.com or visit our web sit at www.provizer-phillips.com. Legislative Counsel’s comments to California’s Toxic Mold Protection Act of 2001 (S.B. 732) as amended May 7, 2001 at p 2: “Toxic Molds eventually may generate more litigation than asbestos”; Sweeney & Mullikin: The Mold Monster: Myth or Menace? 1 Mealey’s Litigation Report: Mold 25 (Jan. 2001) note 2 quoting UPI October 5, 2000: Lawyers tell Boston based “Lawyers Weekly USA” that mold claims are similar to asbestos 30 years ago and litigation is expanding” Michigan Lawyers’ Weekly July 30, 2001 “Toxic Mold Litigation Takes Hold In Michigan, Booming Construction, Climate Ripen State as ‘Hot Spot’ for cases.” “Mold: Serial Litigation Strikes Again, Mealey’s Litigation Report, Vol. 16, #12, p 17 (Jan. 29, 2002):” “When Mold Spreads To Masses,” Michael E. Withey Trial, Feb. 2002.
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