YOUR BUSINESS: Jeff Thaler

Mold infests growing share of liability litigation

Copyright © 2003 Blethen Maine Newspapers Inc.

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ABOUT THE AUTHOR Jeff Thaler of Yarmouth, a litigation lawyer, is chair of the Environmental Law Practice Group at Bernstein, Shur, Sawyer & Nelson and practices in the areas of Toxic Tort, Product Liability, Construction and Environmental Litigation. He has been listed each year since 1988 in "Best Lawyers in America" for environmental and natural resources law. To top of story

Although the Old Testament describes what could be called the first mold remediation process in Leviticus 14:33-45, only recently have American doctors and scientists become seriously concerned about mold infestation in homes and other buildings.

In the past five years, mold - also known as "toxic mold" - has had a growing impact on the real estate, construction, school, health-care, insurance and legal industries. And Maine businesses have more exposure than many realize, due to ice dams, along with snow and rain intrusions through roofs and windows.

In the 1970s and 1980s, mold contamination was the primary cause of poor indoor air quality in only 5 percent of the 500 indoor air quality investigations conducted by the National Institute for Occupational Safety and Health.

By contrast, from 1986 to 1996, molds were the primary source of contamination 35 percent to 50 percent of the time.

In Texas, Farmers Insurance Co. reported 12 mold claims in 1999; 499 in 2000; and more than 8,000 in the first nine months of 2001. In Maine, Portland's Jack Elementary School was found to be full of mold, leading to the permanent closure of that school. Other buildings in Maine also have been abandoned because of mold.

Toxic mold claims generally fall within one of three categories: lawsuits by building owners against builders for either faulty design, construction or both; lawsuits by tenants alleging negligence by a landlord or home owners association for failure to maintain safe and sanitary conditions; and lawsuits by home or building owners against insurers for either breach of contract, breach of duty to act in good faith, or both. School systems have been particularly hard hit throughout the country.

A Florida courthouse, infested by mold because of water infiltration through the exterior hardcoat system, triggered a verdict of more than $11 million against the construction manager and its sureties. A Delaware jury awarded $815,000 to two tenants who suffered health problems while living in apartments with water leaks and mold infestation. And in 2001, a Texas jury awarded more than $32 million to a family whose house was overrun by mold because of water leaks.

There are more than 20 common indoor mold species, whose growth requires three factors: a food source, appropriate temperature and moisture. Primary food sources are materials containing cellulose, such as gypsum wallboard, wood paneling, plywood, pre-cast panels and ceiling tiles, as well as carpeting, wallpaper and insulation. Molds generally thrive at temperatures between 50 and 122 degrees.

Excessive indoor moisture generally comes from a combination of building tightness; water infiltration from leaky windows, roofs, foundations or pipes; and/or moisture condensation from problems with or poor maintenance of mechanical HVAC systems, air conditioning or insulation.

Surprisingly, there are no mandated actions specific to molds and indoor air quality required by any state or federal agencies. There are no "threshold limit values" for airborne concentrations of mold spores, or any EPA regulations or standards. Nor are there any accepted standards for mold sampling in indoor environments, or for analyzing and interpreting the data in terms of human health.

Last year, California became the first state to enact legislation seeking to set permissible exposure limits to "toxic mold," and to adopt regulations and remediation standards.

The Centers for Disease Control states that people exposed to molds may experience illnesses such as allergic reactions of the eyes, nose and throat; dermatitis; exacerbation of asthma; and respiratory distress. Many people with asthma are sensitive to mold; however, people without asthma can still be allergic to mold. Headache, fatigue and autoimmune deficiencies can also be symptoms from mold exposure.

The best way to control and prevent excessive moisture indoors is through proper inspection, maintenance, removal and replacement of any items that have sustained water damage, and reduction of indoor humidity to levels between 30 and 60 percent. Buildings must also be designed and constructed to use proper vapor barriers, management of inside air pressures and flow, proper flashing and effective rainwater drainage.

If you are acquiring or financing office, commercial or residential properties, you must investigate current and historical events of water infiltration and/or mold contamination. Contracts for construction of new facilities or renovation of existing buildings should address potential liability for mold claims arising out of design, specification and construction activities. Consideration of building materials should include the likelihood of those materials to support or resist mold growth.

The bottom line is that any businessperson, public official, homeowner or tenant involved with the sale or purchase, construction, ownership, management, design, or lease of a building - commercial or residential - must be proactive in anticipating and confronting mold issues.

Getting the right air quality testing, medical screening and remediation help is critical. Likewise, careful coordination with legal counsel experienced in environmental and toxic tort cases is essential to achieve cost-effective resolution of mold or other indoor air quality problems.

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