The Creeping Case of Mold, by John Reaves
June 12, 2002
Mold, a type of fungi, has been attacking the world since its inception and helping recycleorganic materials. More than 100,000 types have been identified, of which 1,000 are common inthe United States. Only recently has mold been identified as a culprit behind sick buildings,causing health threats that can range from mild to life-threatening.Mold grows in moist areas, both indoors and out. By themselves, mold may cause allergicreactions and infections in those individuals with sensivities to the particular mold. Mold testingby an allergist may be negative for one type of mold while the individual may be allergic to othermolds. Molds generally can cause the following impacts depending on a person s sensitivities:allergies, infections, irritations and toxicities.There are countless different types of mold, some of which offer medicinal value, such aspenicillin. According to the Center for Disease Control, there are six fairly common moldsfound in households and buildings, of which three can pose significant dangers.—– Those toxicmolds which industrial hygienists are commonly finding in buildings are Penicillium,Stachybotrys Charturum (atra), Aspergillus niger. These molds are thought to have severeimpacts on people, although how they do so, and their exact impacts, is not clearly understood.The true dangers, however, occur after mold produces secondary metabolites, known asmycotoxins, which can be responsible for toxic health results. Each mold can produce manymycotoxins. The nature and number of mycotoxins are not not well known or understood. Moldtesting usually counts the mold s spores, which serve as an indicator of the vastly more populousmycotoxins. Unfortunately, a zero spore count can fail to reveal a dangerous accumulation ofmycotoxins. As an illustration, there are 140 known mycotoxins of Stachybotrys. If such molddries, the mycotoxin production is believed to increase up to 40,000 times!Mold thrives on water. Hence, people typically encounter mold problems after improperconstruction which allows moisture to remain in enclosed spaces, HVAC leaks, plumbing leaksor breaks, flooding, sewer backups and rain storms that force water into walls. Mold takes timeto grow and may go undetected for lengthy periods of time. Mold often grows betweenwallboards and spreads within the building s interior walls. The symptoms are oftenexperienced before the mold is discovered or the causal effect appreciated.People can get home mold tests for around a hundred dollars to determine if there is mold.Formal testing can easily cost a couple thousand dollars. Diluted bleach can be used to removemold from nonporous surfaces. Disposal of previously soaked materials is the only way toremove inner mold.Mold claims for property damage and personal injury are rising in the construction defect,landlord-tenant, personal injury and insurance context. There are generally two kinds of lawsuitsbrought: those against parties causing the problem and those against insurance companies forcoverage. The field is so new that there is very case law specifically addressing mold to guidethe practitioner. Much of the guiding principles, however, has been developed in theenvironmental and environmental insurance coverage fields.Borrowing from these and other fields, mold cases will raise many of the following issues:Personal injury: As a pure legal matter, proving personal injury was a consequence ofnegligent exposure to mold could be extremely formidable. The equities of each case could bemore instrumental in predicting the appeal and outcome of a case.Causation: Consider the expense and difficulty of an industrial hygienist timely identifying themold and its airborne concentration, on one hand, and a qualified medical expert, such as amycologist or toxicologist, concluding the symptoms are caused by such exposure. Junk sciencewill be excluded from evidence.Damages: For personal injuries, consider the complexity of isolating the myriad symptoms thatcan overlap between mold-related and other ailments (e.g., headaches, dizziness, fatigue,confusion, depression, allergies, asthma, nausea, respiratory tract infections). People withsuppressed immune systems are more vulnerable to mold sensitivities. Unlike personal injuryclaims, property which has mold contamination can be identified and linked to a cause.Damages can be readily quantified. Hence, property damage claims make the best mold casestoday.The traditional causes of action for negligence, breach of contract, fraud can be used to seekcompensatory damages. For instance, if a party fails to exercise due care in preventing mold soutgrowth, or fails to disclose that during a property transfer, he may have exposure for propertydamages as well as personal injury.Claims for design defect and negligence by architects and builders will arise when they allowareas in which moisture can accumulate or get trapped.Landlord/Tenant law will likely consider breach of contract, breach of warranties ofhabitability and quiet enjoyment, constructive eviction for mold claims.Naturally, insurers will be asked to bear the brunt of mold litigation. Property (first party)insurance: Mold, wear and tear, and rot are all excluded under typical property policies. Windand sudden water damage (e.g., burst pipe) is usually covered and should include coverage fordamages flowing therefrom, including mold. Liability (third party) insurance: Defendantsmay be defended at the expense of the insurer where the allegations and extrinsic evidence createa possibility of coverage. Many insurers are trying to bootstrap their pollution exclusion ontothe mold, with limited success.A major irony is that the insurers actions in responding to water damage and mold claims willcome under intense scrutiny in a new hybrid of bad faith actions. In these cases, insurers fail toproperly respond to water damage claims in a variety of ways: delays, hiring defloodingcompanies with no mold remediation understanding or experience, making superficial cures, orgenerally providing half-measures to resolve the problem. Such cost-saving measures can hauntthe insurer when a claim for mold remediation, personal injury, temporary housing, and extracontractualdamages, which is far more serious and expensive to resolve than the initial propertydamage claim, is spawned.