Mold Claims Create a New Frontier in Constuction Defect Litigation

Mold. An extremely common organism, it’s found in veritably every home and building. Now it’s at the center of what could become one of the fastest growing areas of both construction defect litigation and toxic tort litigation in California.

Over the past few years, the presence of mold in buildings has increasingly been cited as the cause of health problems for people who interact with so-called ‘sick buildings.’ While the actual number of judgements favoring such plaintiffs is not dramatic as yet, the implications of the increase in sick building claims are potentially far-reaching.

A prime example of what can happen is currently unfolding in the city of Visalia, Calif., population 96,750, nestled in the state’s agricultural heart, the San Joaquin Valley.

On March 27, 2000, Superior Court Judge Elisabeth Krant filed a lawsuit against Tulare County in which she alleged that a variety of ongoing medical problems she had been experiencing stemmed from mold contamination in her chambers in the county courthouse located in Visalia.

Since then, approximately 275 claims have been filed against the county of behalf of individual employees of that courthouse. A great number of those claims, alleging that exposure to toxic mold in the courthouse sickened employees, were recently rejected, opening the door for those claimants to file personal injury claims. There are approximately 500 employees at the courthouse.

One of the mold types found in the courthouse was Stachybotrys chartarum, a potentially dangerous strain which has reportedly been linked to a wide variety of adverse health effects, ranging from allergic symptoms to pulmonary bleeding fatalities among children.

Alexander Robertson IV, a Woodland Hills, Calif., attorney who represents Krant and the majority of individuals who have filed claims against the county, said he currently represents 1,000 plaintiffs in mold cases throughout California. Those cases involve a hospital, school districts (for portable classrooms) and the courthouse in Central California, as well as single-family homes, apartments and condominium projects.

Robertson frequently teaches and gives lectures to the legal community. “Every time I do that as part of a panel-either a toxic tort seminar or construction defect-it’s standing room only,” he said. “Everybody’s trying to get in on it right now.”

While the claims filed against the public entity on behalf of the employees represent the largest single group of potential plaintiffs, claims have also been filed on behalf of individuals who used the courthouse, including vendors and attorneys who are not employed by the county. In addition to Judge Krant’s lawsuit, two other judges have filed claims. A number of workers’ compensation claims have also been filed.

“I understand the plaintiffs’ attorneys have represented to their clients that they can avoid the workers’ comp exclusivity rule based on the sections provided for in the Labor Code,” said Michael Woods, an attorney from McCormick Barstow Sheppard Wayte & Carruth LLP in Fresno, who was retained by the Tulare Board of Supervisors to defend the county.

The exclusivity rule, Woods explained, is one that generally states an individual cannot sue his/her employer in civil court. “Your exclusive remedy is that provided for under the workers’ compensation law,” he said. However, there are certain grounds, often having to do with concealing the cause of the injury, on which one can get around that exclusion. In the Krant case, the judge alleged that the cause of the injury and the dangerous condition were concealed from her and that county employees misled and failed to totally inform her of the presence of mold.

“[The county] had numerous written reports identifying a toxic mold problem in the courthouse,” Robertson said. “Then they had hundreds of people who were making health complaints, but the employer, the county, failed to disclose to their employees what was making them sick. They kept saying, ‘There’s no problem here.’ That’s a perfect example of where this exception comes into play.”

Although Woods said that the county has a “significant self-insured retention,” he would not disclose the level of that self-insurance. That information, as well as any carriers that may be involved, has not yet been discovered in the process and is not public record. Beyond that, the county has a layer of coverage through a Joint Power Authority. Above that, there is excess insurance coverage.

Woods maintained that this type of case is particularly expensive to litigate because of the lack of scientific evidence and proof that there is a causal connection between exposure to fungi and symptoms. On the medical side alone, a veritable army of experts can be involved. These include mycologists, microbiologists, industrial hygienists, occupational environmental doctors, toxicologists, immunologists, allergists, and neuropsychologists. Recently conducted air sampling tests alone cost the county approximately $35,000.

“Then you get into some of the explanations for why there is water present,” Woods said. “You get into structural engineers, mechanical engineers, roofing engineers, the whole aspect of construction of the building or the area where there is mold.”

Another aspect of the expense comes into play if a construction defect case is thrown into the mix. “It gets very expensive because everyone who is in any way associated with the construction is typically named as the defendant,” Woods explained. He indicated that is happening in this case, where in the amended complaint filed by Judge Krant, additional defendants, in one way or another involved with the design, construction or maintenance of the courthouse, have been added.

According to Robertson, whose career as a construction defect attorney spans 15 years, prior to the last six years or so, such cases dealt solely with a property damage aspect, such as a leaking roof or windows. The personal injury component-when mold grows and makes the occupants of the building sick-did not enter the picture.

“Construction defect comes into play because you don’t have mold growth without typically a leak,” Robertson said. “We have to identify the defect which caused the leak to occur, fix the leak, stop the water from coming into the building, and then remediate the mold. Otherwise the mold just keeps growing back.”

In an Aug. 25 letter to Tulare County Risk Manager Gregg Breed regarding a preliminary report on total airborne fungi assessment in the courthouse, certified industrial hygienist Steven C. Davis of Health Science Associates stated, “The overall preliminary impression of the data suggests that the Courthouse is healthy.”

One thing both sides accede to is that there is not a single, standardized test currently recognized by courts in the state as a determiner of what type of mold a person has been exposed to-not to mention where or when that exposure took place.

Robertson said claimants go through a diagnosis by an occupational environmental medicine doctor, who takes a look at both an individual’s symptoms and the environmental exposure to mold, and then makes a diagnosis by basically linking the two.

He also indicated that some of the claimants have undergone blood testing to determine what effect, if any, there has been on their immune systems.

“There is a particular test that one group of plaintiffs’ attorneys has recommended that is conducted by a Dr. Ordog,” Woods said. “This particular test is not recognized by the FDA. To my understanding, they use this test to determine whether an individual has been exposed to mold or fungi. The test discloses the presence of antibodies…The creator of that study does not recommend it to be used in the manner in which the plaintiffs are attempting to use it in this case.”

“Regarding the mycotoxins that some fungi are physiologically capable of producing, there is no airborne test for those either,” said Chris Lozano, also an attorney from McCormick Barstow Sheppard Wayte & Carruth. “So testing people doesn’t really give you any answers. A more significant test would be to test the actual workplace, but that just gives you general levels. There are no state or federal guidelines as to what constitutes an acceptable or an unsafe indoor environment when it comes to mold.”

Woods said that the stachybotrys found in Judge Krant’s chambers was a baseball-sized colony located on some pipes, which were separated from the chambers by insulation and ceiling tile.

“Once that mold was discovered, it was immediately removed,” Woods said. “Both tests which were actually conducted in her chambers showed no stachybotrys. In other words, there was no indication that stachybotrys had actually migrated to her chambers.”

In the meantime, the courthouse has drastically curtailed operations because so many people are out on disability. The clerk’s office shuts down at 1 p.m. every day, and custody arraignments are no longer held at the courthouse due to a lack of personnel.

“The union representing the public defenders and district attorney, 89 attorneys that work in that courthouse, have all filed government claims for personal injury, and they are demanding that the county close the courthouse and clean it up,” Robertson said. “The judges collectively have gone to the attorney general’s office and the attorney general’s office has agreed to launch its own independent investigation.”

“I think the litigation is going to be extensive, and it’s going to be expensive,” Woods concluded. “But we’re satisfied that the courthouse is safe for employees to work in, and so the county will be vigorously defending these lawsuits.”

Topics Lawsuits California Claims Workers' Compensation Construction Pollution