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Introduction
Mold litigation has received a tremendous amount of press and attention in the
last several months. Almost any night of the week, you can see a newscast on the
mold infestation in a school, apartment, or house on both national and local news
with concerned reporters standing in front of a structure while industrial remediation
crews dressed in space suits remove bags of mold-covered building materials. The
coverage is approaching almost hysterical proportions. At the same time, plaintiffs'
lawyers and their consultants are holding mass town meetings in suburbs, neighborhoods,
and condominium associations to inform citizens and possibly sign up a few clients.
Despite the hype, mold is
something to be taken seriously. Although molds have been around forever, some
molds may create mycotoxins that can be harmful to humans. Certain individuals
may be very susceptible to exposure to these molds and mycotoxins and may suffer
adverse effects.
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Why
the Proliferation of Mold Claims?
There are a number of reasons
for the seemingly sudden explosion of mold claims in recent months. Among others
are the following:
- Lack of ventilation in
buildings is a problem. Newer energy conservation design criteria may have reduced
the amount of fresh air which is exchanged in the building.
- Poor design and construction
practices may result in pervasive leakage and more moisture inside Buildings.
- Building materials may
contribute to the problem. Mold grows on organic surfaces, especially
cellulose contained in wood products such as paper-faced drywall, sheeting, cellulose
insulation,felt building paper, and other organic building materials.
Lawsuits
Against Building Owners and Managers
Among the most common targets of lawsuits are building owners, building managers,
and building associations. Building owners and managers are frequently sued by
tenants and employees of tenants for failure to properly maintain common areas,
failure to provide a safe environment, failure to provide adequate air conditioning,
and air quality, failure to repair leaks, and many other claims. These suits usually
allege that the owner or manager knew of some condition - such as a chronic unrepaired
leak or inadequate humidity control in the HVAC system - but failed to take any
action. The building owners or managers are usually sued for negligence, duty
to maintain premises in a safe condition, duty to control and operate HVAC safely
and properly, duty to select and supervise contractors, breach of contract, breach
of express and implied warranties, breach of covenant of quiet enjoyment, negligent
misrepresentation, fraud, fraud in real estate transaction, and nuisance. In Texas,
a building owner is obligated to use reasonable care to protect the tenant (and
the tenant's invitees) from injuries caused by an unsafe condition on the portion
of the premises under the landlord's control. Landlords typically have control
over common areas and any other areas may include roof systems, HVAC systems,
duct work, and internal plumbing systems, all of which can have leaks that result
in mold growth. The landlord must use reasonable care to protect against risks
of which the landlord has constructive knowledge.
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Damages
Recoverable
Monetary damages recoverable in a mold case can be quite extensive. There can
be both property losses and personal injury. In addition, the cost of remediating
a home or building can be extremely expensive. The property losses alone can be
very significant. Potential damages include investigation costs, loss of use,
cost of repair, mental anguish, and attorney's fees.
Building
Operation and Maintenance Guidelines
The Texas Department of Health (TDH) Voluntary Indoor Air Quality Guidelines include
a section on building operation and maintenance. Additionally, the Environmental
Protection Agency's (EPA's) Mold Remediation guidance discusses molf prevention
tips, which relate to operation and maintenance. The main components of an operation
and maintenance program are regular inspections of building systems, prompt repair
of damaged systems and leaks, drying out any water-damaged building material within
24-48 hours, training employees to recognize potential sources of indoor air problems,
and documenting training, inspection, and repair.
More specifically, TDH and
EPA recommend that schools or building owners:
- develop a schedule for
inspecting, cleaning, and repairing building systems, such as the HVAC system;
- adhere to product manufacturer's
maintenance requirements;
- operate HVAC systems to
provide adequate outside air as well as moisture control;
- promptly repair damaged
building systems that result in condensation or water leaks;
- remove or dry, within 24-48
hours, water-damaged building materials and furnishings;
- maintain low indoor humidity
or prevent moisture due to condensation by increasing surface temperature through
insulation or increased air circulation; and,
- avoid water pooling around
foundations by providing adequate outdoor drainage.
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What
to Do if Mold is Discovered in a Building
If
an owner, manager, or tenant finds mold in the building, it is usually caused
by a source of water or moisture that has not been adequately addressed, or it
may be the result of excessive humidity caused by HVAC design, construction, or
operation. The following are some of the steps you might consider in addressing
the appearance of mold.
- Find the
source of the water and cut it off. It could be a water leak, an air conditioning
leak, improper humidity levels, a burst pipe, a flashing problem, improper owner
use of equipment, other, or even a combination. The important thing is to stop
the water infiltration.
- Test the
mold. Find out if it is one of the few molds that produce mycotoxins that can
be harmful to humans.
- Remove
the mold. Keep removing the mold until there is no more to be found.
- Establish
a maintenance program to uncover any mold problems at an early stage. This includes
a program to ensure the proper operation and cleaning of the HVAC system.
- Establish
a procedure or protocol for maintaining and recording incidences of mold infestation.
Of course,
not all allergic reactions are caused by mold; dust and pollen could also be the
cause. There are now simple tests that check for allergies to dozens of molds.
In one of these tests, the "prick test," a doctor applies a mold allergen
to the skin then pricks the skin without drawing blood. If the area develops a
welt, you have a mold antibody.
Possible
Insurance Coverage
Building owners and managers typically carry commercial property coverage and
third party liability coverage. The commercial property coverage insures the owners'
property. It may provide coverage for mold-related damage to property if the cause
of the mold is itself a covered peril. For example, if a rook leak is covered
by the policy, the resulting mold infestation may also be covered as an ensuing
loss. Commercial general liability policies may provide coverage for damage to
the person or property of third parties. There is an open question as to whether
these claims are excluded under the pollution exclusion in the standard general
liability policy. The courts are divided on that issue but the better-reasoned
opinions hold that mold is not a typical pollutant, and that the damage is not
excluded.
Conclusion
Mold has been with us for eons. Serious mold claims, however, are relatively recent.
These claims can have far-reaching financial impacts. The impact is not only the
direct costs of repair and remediation, but also the indirect costs and possible
stigma of having a building that has been infested with mold. Building owners
and managers must be aware and must have a plan for dealing with these claims.
James L. Cornell is an
attorney with the Houston office of Haynes and Boone. His practice focuses on
commercial litigation, including construction, architectural, engineering, and
landlord-tenant issues. Mr. Cornell may be reached at cornellj@haynesboone.com.
Mr. Cornell would like to thank Pat Weilinski and Margaret Menicucci for their
contributions to this article. Mr. Weilinski practices in the Fort Worth office
of Haynes and Boone, and Ms. Menicucci practices in the Austin office of Haynes
and Boone.
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