Is mold harmful to your
health?
Read the stories below to find the answer!
Toxic
Mold Is Toxic To Builders
by Stuart Lieberman
Although mold
has been on this earth longer than we have, it has not represented
much of a litigation threat until recently. In the last five years,
things have changed dramatically. Mold claims are on the rise,
lawsuits are being filed and settled, and insurance companies
are being forced to pay mold claims.
This past
November, the owner of a luxury apartment complex in Florida agreed
to pay several millions of dollars to settle a class action lawsuit
which had alleged that an apartment building was mold infested.
Under the
settlement agreement, the owner reimbursed tenants for medical
bills and property damage that the class action lawyers alleged
was related to a mold outbreak. According to published reports,
regulatory filings by the owner indicated that the settlement
and related costs would amount to $25 million. $25 million for
mold! In addition, published reports indicate that $38 million
was spent on mold remediation costs and another $12 million for
relocating tenants, replacing damaged furniture and clothing.
This past July, teachers in a Florida school district alleged
that mold inside classrooms was making them sick. They hired a
lawyer who sought monetary damages in order to compensate the
teachers for their failing health and money to clean up the mold.
In that case, the school district complained that it had spent
thousands of dollars to remediate mold and that it did not believe
it is responsible for making anybody sick.
Just several
weeks ago, officials at North Carolina Central University proclaimed
that two dormitories were now free of toxic black mold. That was
the good news. The bad news is that the invasion of the toxic
mold required that the two dormitories be placed out of commission
for an extended period and that students be housed in area hotels.
At the end of the day, the North Carolina Central University ended
up spending $25 million on black mold.
The University
has since hired lawyers to take legal action against those who
designed and built the dormitories. According to the school, somebody
has to pay for the toxic mold and it is pursuing the architect
and construction company. There is enough misery in this mold
story to satisfy everyone. The bottom line is that mold has been
here longer than we have. But mold litigation is new. New, but
not going away in the near future.
Builders, developers, architects, home inspectors, lawyers, and
every other professional and trade member involved in selling
and constructing homes needs to be aware of the mold issue. When
things go bad and litigation is filed, everyone ends up becoming
a defendant. Mold litigation will ultimately be very encompassing.
It is important
that developers use ventilation systems that are sufficient for
combating mold issues. Whenever leaky roofs or leaky pipes are
determined to exist, they need to be responded to properly, because
mold likes moisture and it likes to grow in the dark. Proof that
a developer, or former owner, was aware of a long-term roof leak
or pipe leak and failed to abate it might very well subject somebody
not just to the cost of addressing the mold issue and paying for
health-related bills, but perhaps even punitive damages designed
to punish the wrong doer for ignoring the problem.
As the mold
bill increases, who is going to pay for it? Insurance companies
will ultimately have to pay many mold-related costs. So will the
uninsured, builders, and perhaps in certain cases even real estate
professionals whom, it will be alleged, failed to disclose mold
conditions.
At the end
of the day, all of those costs will be redistributed among the
general population. Rest assured that at the end of the day, we
will all pay to address emerging mold concerns.
Published:
March 4, 2004
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Davie
FL
Posted on Wed, Oct, 02 , 2002
As mold creeps into homes, it's scaring off insurers
BY ROBIN BENEDICK
South Florida Sun-Sentinel
FORT LAUDERDALE, Fla. - KRT NEWSFEATURES
When a pipe
burst under the bathroom of their Davie home almost 16 months
ago, Charles and Claudette Armstrong mopped up the water and paid
a plumber $300 to fix the pipe.
They thought
that was the end of their problem, but it was the beginning of
their nightmare.
Two months
after the leak, slimy black mold appeared on a closet wall in
a bedroom. It spread throughout the two-bedroom house, aggravating
11-year-old Alexander's asthma and putting him the hospital. Even
Harry the dog got sick.
The unmistakable
stench of mildew permeated every room, finally forcing the family
into an apartment this past spring.
“No
family should go through what we've been through," said Claudette
Armstrong, 47, who cleans houses part-time. "The mold got
so bad you couldn't breathe. You walked inside and your throat
burned. We all got sick. You can't go in now without a mask."
Mold has been around forever, but only in recent years has it
emerged as a major financial and health problem nationwide. Texas
and California lead the country in insurance claims for mold,
but Florida, known for its hot, wet and humid climate, isn't far
behind.
"Three years ago we had hardly any mold claims in this state,
and now we're seeing an explosion of them," said Sam Miller,
vice president of the Florida Insurance Council.
Stories about mold creeping through homes, schools and buildings
have become more common since last year when a central Texas homeowner
won $32 million in a lawsuit against Farmers Insurance over water
damage and mold in her mansion. The case is on appeal, but Farmers
announced last week that it is pulling out of Texas after losing
hundreds of millions of dollars on mold and water-damage claims.
Other insurers are expected to follow, much like they did after
Hurricane Andrew ravaged South Florida in 1992.
In California,
where the fungus frenzy is dubbed "the mold rush" by
the insurance industry, the growing number of mold claims has
made it difficult for builders to get insurance to construct new
condos.
The surge
in claims has fueled debate over who should pay for mold, which
is expensive to clean up, and how harmful it is.
Insurers
predict the nationwide tab for mold cleanup will soon exceed the
billions of dollars paid out for Hurricane Andrew claims.
In Texas
alone, insurers have paid more than $1 billion for mold settlements
over the past two years, industry officials said. Texas homeowners
now pay an extra $444 a year in insurance premiums for mold coverage.
Real estate agents also warn buyers in Texas that they may have
a tough time getting homeowners' insurance because of the surge
in mold claims.
In California,
new laws require homeowners selling a house to disclose whether
it has had mold or water damage.
In Florida,
insurance companies are required to pay for mold cleanup only
if it results from sudden water damage, such as a burst pipe.
But the payouts
in Florida are climbing as the number of claims and lawsuits over
mold increase. Insurers in Florida have asked the state Department
of Insurance to step in and either exclude mold from any coverage
in homeowners' policies, set limits on the amount of money they
must pay out or allow them to charge higher fees to cover cleanup
costs. The state agency has held public meetings on the issue.
Many scientists
think mold problems are on the rise because of modern construction
methods. Houses are more airtight, making them susceptible to
mold growth. And powerful air-conditioning systems may spread
mold spores throughout the house.
"We've been getting a tremendous volume of calls about mold,"
said Paul Johnson, an environmental scientist for the Broward
County Health Department. He said people should open windows a
few minutes a day, even with the air conditioner on, to let fresh
air in the house.
At the heart
of the debate is just how dangerous mold can be. Most mold is
harmless, like the fuzz growing on old bread or in the shower
stall. But more serious strains, often unseen behind walls and
in air conditioning coils, produce toxic substances that can cause
respiratory problems, rashes and infections.
"There
are very few mold claims I see that are actually valid,"
said Los Angeles lawyer Steve Henning, whose law firm is a leader
in defending insurance carriers against mold claims. He wrote
a pamphlet for insurers called Defending the Toxic Mold Claim.
Henning blamed the media for the hype over mold and for portraying
it as a hazardous substance. "It's really scaring people,"
he said.
Fear is what
eventually drove the Armstrongs from their Davie home in a working-class
neighborhood near university row this past May.
The family
had lived in the beige, concrete-block house since 1998 when a
pipe burst last summer, spewing water all over the floor. They
contacted their insurance company, Clarendon National, and waited
for the company to have the pipe fixed. They heard nothing. So
after a month, the family hired an adjuster to negotiate with
Clarendon and paid $300 to fix the pipe. But water apparently
dripped inside the walls and mold soon appeared in the kids' bedroom.
Dark splotches showed up on a sofa, kitchen cabinets and floorboards.
Although
the adjuster negotiated a $4,800 initial payment from Clarendon,
the company made out the check to the wrong mortgage lender, and
the Armstrongs couldn't cash it. So Clarendon issued a replacement
check in January, but it said "final payment" on it.
The Armstrongs refused to cash that one.
In April,
Clarendon sent an environmental inspector to the house. He determined
that clean up would take four months and cost almost $45,000.
Still, Clarendon did nothing. So the Armstrongs hired Hollywood
attorney Lee Schillinger, who is trying to get the company to
make repairs. The family also filed a complaint with the state
Insurance Department, which is investigating.
Clarendon
has agreed to pay four months rent, Schillinger said, and has
reissued a check that the Armstrongs will use to help pay their
monthly $799 mortgage, which includes their insurance premiums,
and $940 rent. Charles Armstrong, 46, is a brick mason, and the
family is struggling financially.
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Music
maker sues over mold in million-dollar Fisher Island condo
Associated press – Sun Sentinel . Posted July 30 2003
MIAMI -- A
music industry executive who represents U2 and the Rolling Stones
says his luxury condominium on Fisher Island is infested with
mold and he's suing to cancel his purchase.
Joseph Rascoff
sued developer Fisher Island Holdings in federal court Monday.
Rascoff claims construction defects and a faulty air conditioning
allowed mold to spread throughout his three-bedroom oceanfront
apartment.
The New York
business manager and tour producer wants to cancel his purchase
of the 3,300-square-foot condominium, which he bought in January
2001 for $1.5 million.
The suit asks
for another $700,000 to cover remodeling and decorating expenses,
and furnishings allegedly ruined by mold.
Celebrities
like Mel Brooks, Anne Bancroft and Oprah Winfrey are among those
who live on exclusive Fisher Island, south across a shipping channel
from Miami Beach.
Rascoff claims
he faced a plague of blotchy spots that started on an electrical
outlet in the master bedroom last summer and within months had
marred his valuable paintings and designer wallpaper and left
his new vacation home unlivable.
Fisher Island
Holdings said a malfunctioning air conditioner caused the mold
outbreak, but maintains it has cleaned the condo and fixed the
problem.
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Mold
claims soar
BY DOUGLAS HANKS III AND MELINDA ZISSER
MIAMI
Amado Valdes,
61, keeps a jar of Cetaphil skin cream by his bed, to soothe the
itchy dark welts on his hands and neck. A humidifier bubbles at
night to moisten his lungs and calm his coughing fits. Recent
months have brought new daily rituals: popping Allegra and Clarinex
allergy pills.
Valdes claims
he is sick because his house is sick -- infested with toxic mold
that has left the two-story stucco building uninhabitable and
possibly unsalvageable. A clean-up expert has told Valdes and
his fiancée, Maria Fernandez, that their home needs to
be stripped bare to the studs and rebuilt wall by wall.
The cost:
$247,000, more than double the $110,000 county tax assessors estimate
as the market value of the Southwest Miami-Dade home.
The house
also happens to be insured for $110,000, but that is a moot point
for now. Valdes' insurance carrier has balked at funding a clean-up,
thus creating the kind of fight that has rippled across Florida
in recent years.
TEXAS
Once just
a chronic nuisance in soggy Florida, mold has emerged as a high-stakes
and hotly contested plague, with insurers predicting a growing
flood of homeowner claims that could bankrupt the industry. They
point to Texas -- which saw $843 million worth of mold claims
in 2001, up from $153 million the year before -- and warn that
Florida is the next venue for plaintiffs' lawyers looking to cash
in on breathless mold horror stories.
LA., CA.
Erin Brockovich,
the legal crusader whose life story was made into a Julia Roberts
movie, has filed a mold lawsuit against the builder of her Los
Angeles mansion. Ed McMahon is asking for $20 million after mold
allegedly infected his home and killed Muffin, the family dog.
Whether fueled
by a rash of wet weather or a flood of media coverage and profiteering
lawsuits, mold has vaulted to the top of the insurance industry's
worry list. Meanwhile, homeowners and their advocates are accusing
insurers of trying to brush off a serious malady only recently
recognized as a persistent problem.
State Farm,
Florida's largest insurer, fielded 83 mold claims in 2000; a year
later, that figure jumped to 700, according to the Florida Insurance
Council.
This year,
almost all of Florida's home insurers have asked state regulators
for permission to exempt or limit mold damage from homeowners
claims, and the insurance department will convene its first hearing
on the requests Tuesday in Plantation.
This follows
congressional hearings on mold earlier this month and the launching
of the federal Centers for Disease Control and Prevention's first
major study on mold health risks.
''Mold is,
unfortunately, hot,'' said Roy Oppenheim, a Weston lawyer who
has spent the last year nurturing a budding mold practice. He
has talked about mold dangers on a television station in Tampa,
where Oppenheim & Pilelsky has an office, and posted a primer
on mold litigation on the firm's website.
''We've looked
at around 20 or 25 [cases] in the past three months,'' he said.
``People are sending me mold spores.''
Juan Méndez
has also looked to mold to boost his business. The Miami public
adjuster negotiates with insurers on behalf of policyholders and
typically keeps 10 percent to 35 percent of any reimbursement
as his fee.
Amado Valdes
hired Méndez after seeing his full-page advertisement in
El Nuevo Herald, with photos of grimy bathroom grout and a headline
about a Texas family winning a $32 million verdict over mold contamination.
Two years ago Méndez handled no mold claims, but now his
300 mold clients make up 90 percent of his business.
''I really
think it's a matter of the public being more educated and being
aware this could be a cause of many of the health issues out there,''
Méndez said. ``And the insurance industry is working hard
to keep it very hush-hush. For years the tobacco industry said
tobacco doesn't cause cancer. And people bought that too.''
Certain types
of mold, a fungus that thrives in damp places, produce microscopic
airborne spores that can irritate lungs, particularly for people
allergic to mold or with weakened respiratory systems, said Dr.
Eleni Sfakianaki, medical director of the Miami-Dade Health Department.
PARKLAND,
FL
Those health
concerns prompt occasional closings of buildings infested with
mold. Broward County is delaying the opening of Westglades Middle
School in Parkland -- and possibly Park Lakes Elementary in Lauderdale
Lakes -- after discovering mold rotting drywall in both buildings,
the latest of the school system's long-running mold woes.
Five Broward schools are slated for mold repairs this summer and
fall, while officials have given a clean bill of health to Virginia
Shuman Young Elementary, despite complaints from parents.
OPA-LOCKA
In May, the
city of Opa-locka forced residents to move out of an apartment
building condemned for mold contamination after a gunman broke
pipes in a battle with police. Polk County reached a $35 million
with its insurance company in 1996 over a mold-infected courthouse.
And in Honolulu
just last week, Hilton closed all 453 rooms of its new $95 million
hotel after discovering a mold outbreak.
But only
in the last three years have insurers faced homeowners claiming
mold hazards of their own, industry executives said. The first
concentration of residential mold complaints surfaced two years
ago in Texas, which saw 2,472 insurance claims for mold damage
in 2000. Mold claims soared to 14,706 there a year later, according
to the Insurance Information Institute, an industry trade group.
''It really
began to take off in 2000,'' said Robert Hartwig, senior vice
president of the group. ``That's really when we began to see exponential
growth.''
Hartwig blames
plaintiff lawyers looking for ''the next asbestos,'' the insulation
material linked to health problems that formed the basis of multimillion-dollar
verdicts against asbestos companies and building owners in the
1980s and '90s.
''Mold as
we know it has been around in a terrestrial form for 400 million
years,'' Hartwig said. ``Clearly something has changed in the
equation.''
Homeowner
advocates point to modern home construction as a potential culprit:
houses sealed tight against drafts eliminate regular air flow
inside, making it easier for mold to incubate. And the rise of
drywall and plasterboard walls after World War II provided mold
the kind of soft, papery food it thrives on.
Dr. Kaye
Kilburn, a mold researcher at the University of Southern California,
even wonders whether particularly virulent spores have blown here
in recent years from the Sahara or Gobi deserts.
Kilburn,
a professor of internal medicine at USC's Keck School of Medicine,
has treated 75 patients he says were afflicted with mold-related
symptoms, including slowed brain activity, near blindness and
a loss of balance so severe they need canes to steady themselves.
''It's like
they aged overnight,'' he said.
The insurance
industry maintains that only a small portion of people with allergies
suffer health problems with mold. The Centers for Disease Control
in June announced a study of mold medical research this year to
help clarify the issue, an agency spokeswoman said.
Richard Lipsey, a mold inspector and toxicologist in Jacksonville,
said he has found that mold ills are hard to predict. ''Mold is
an idiosyncratic problem,'' he said. ``It treats everyone differently.''
BOCA
RATON, FL.
Danny Israelian
was a month old in 1999 when his family moved into a new Boca
Raton house built by GL Homes, a major South Florida developer.
The Israelians are suing GL and the company's plumber, claiming
a drain that workers failed to connect to a pipe had quietly seeped
three years worth of bath water into their walls, spawning entire
colonies of mold without the family knowing anything was wrong.
The Israelians
only discovered the mold when water came through a wall in their
daughter's bedroom in November, three years after they moved in.
Talia suffered coughing spasms while she slept, but her little
brother has spent most of his life in and out of hospitals and
clinics being treated for breathing problems, according to the
suit.
GL's lawyer, Andrew Green, said the Israelians have not allowed
the company to inspect their home which, according to the suit,
they abandoned -- furniture, clothes and all -- after discovering
the mold.
Green said
the plumbing problem was probably a faulty gasket and not a pipe
that wasn't connected. He did not address the specific allegations
in the suit, but did characterize the mold issue as a manufactured
crisis.
''Certainly
in South Florida, mold is everywhere,'' said Green, a partner
with Kluger Peretz in Miami. ``Until recently, you would take
a little water and detergent and wipe it out. Now people run to
doctors and lawyers.''
Homeowners
themselves are often at fault for not tending to a festering water
problem, said William Stander, a Florida lobbyist for the Alliance
of American Insurers. ''When people have a leaky pipe they haven't
taken care of for three years,'' it isn't covered, he said.
TEXAS-STYLE
STAMPEDE
California
is a distant second to Texas in mold claims (industry officials
say the Lone Star State accounts for 70 percent of all mold complaints),
with Florida finishing third. Florida has just begun to see homeowner
mold suits, but insurance executives predict that a Texas-style
stampede is sure to follow.
''Our concern
is for the future,'' said Vince Rio, a State Farm lawyer in Tallahassee.
'Certainly it's possible that if another hurricane hits, we'll
have people coming back years later saying: `Three years ago you
didn't clean up all the mold, and now my house is uninhabitable.'
''
Insurance
carriers currently cover mold damage when it results from a sudden
catastrophe, such as a rainstorm, rather than a maintenance problem,
such as a leaky water heater. But insurers have asked the Florida
Insurance Department to let them exempt mold damage from coverage
or, as in State Farm's case, limit reimbursements to between $10,000
and $50,000.
The department
has received requests from 431 commercial and homeowner insurers
asking for mold waivers, and State Farm and Allstate have asked
for rate hikes tied in part to rising mold claims.
Twenty-three
states already have mold exemptions or limits, according to Policyholders
of America. ''Two years from now you're not going to see a policy
without a mold exclusion,'' said Mark Miller, a partner with Greenberg
Traurig in Washington who represents Florida commercial property
owners in mold disputes with their insurance carriers. ``It won't
be insured. It will be like terrorism insurance.''
Policyholders
of America, the insurance industry's main foe on the mold issue,
has opposed the rate hikes and mold exemptions. The group says
Florida insurers have improperly rejected or delayed action on
1,384 mold claims through February of this year.
President Melinda Ballard said insurers often drag their feet
when confronted with even small mold clean-ups, inaction that
allows spores to multiply into dangerous numbers. That is what
she accused Farmers Insurance of doing in 1999 when she discovered
mold inside her family's home in Dripping Springs, Texas.
Two years
later she won $32 million in a civil trial, the largest mold verdict
ever.
Both sides of the mold issue point to the Ballard case as a turning
point for attracting the attention of reporters and litigators,
and with them the public at large. It was the Ballard award that
Méndez, the Miami claims adjuster, cited in his El Nuevo
ad.
Sitting in
Amado Valdes' living room, Méndez points to the tea-colored
ring on the ceiling and the hole in the wall under it, stuffed
with newspaper. Those are the most visible signs of mold downstairs;
upstairs, the tub is scarred from mold stains and cleansing chemicals.
Valdes and
Méndez blame a faulty shower pipe that sent water into
the walls. Valdes and Fernandez, his fiancée, first noticed
mold in their shower at the beginning of the year.
Valdes said
his coughing and itching started soon after, while Fernandez began
complaining of headaches. Her 8-year-old grandson, who uses a
wheelchair because of long-standing physical problems, spent several
days in the hospital when he had trouble breathing, Valdes said.
An inspector
Méndez hired concluded the mold had spread from the shower
to virtually everywhere in the house, meaning the drywall and
much of the carpet and furniture needs to be replaced for the
house to be livable.
Clarendon
Insurance has not yet offered any money for repairs and last week
questioned Valdes under oath about the claim, Méndez said.
Clarendon
officials did not return phone calls requesting comment for this
story.
Meanwhile, Valdes, Fernandez, and her two children and two grandchildren
continue to live in the house -- grimy spots, skin cream and all.
''I am really
afraid we're going to get worse,'' Valdes said. ``We don't ask
for anything more than our health.''
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