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The Honolulu Advertiser

Posted on: Sunday, July 20, 2003

Mold-damage lawsuits rise sharply

By Genaro C. Armas
Associated Press

Hilton has sued about 25 defendants alleging defects in the construction of its Hawaiian Village Kalia Tower and projecting $55 million in cleanup work.

Advertiser library photo

WASHINGTON — It's usually just scrubbed off tile grout, shower stalls and basement walls, but lately, mold has become the subject of expensive insurance claims and multimillion dollar lawsuits.

Builders, insurance industry groups and other businesses last week blamed overzealous lawyers and increased media attention for a threefold increase in mold-related lawsuits the past three years. There are 10,000 such cases pending today nationwide, the Insurance Information Institute says.

In Hawai'i, the most visible case involves the Kalia Tower at the Hilton Hawaiian Village. Hilton has sued about 25 defendants alleging defects in the tower's construction that have contributed to $55 million in projected cleanup work.

The tiny fungi in mold can trigger allergic reactions similar to hay fever, according to the Environmental Protection Agency. The Centers for Disease Control and Prevention has said that some agriculture workers with chronic exposure to mold can experience respiratory illnesses.

But many of the lawsuits contend that mold damage inside a home or building that wasn't cleaned up properly caused more serious health problems like bleeding in the lungs or brain damage.

There isn't enough scientific evidence to support those claims, Bryan Hardin, of the toxicology consulting firm GlobalTox, said at a forum on mold cases at the U.S. Chamber of Commerce.

The CDC and the National Academies of Science are both currently studying mold's effects on human health.

"Lawsuits over fungi fail to meet the test of sound science," said Lisa Rickard, president of the chamber's Institute for Legal Reform.

George Lang, a Chicago lawyer who has handled mold cases, said numerous other studies have pointed to a possible link between molds and more serious illnesses. The so-called mycotoxins found in some mold can also be found in weapons used in chemical warfare, he said.

Lawsuits have increased recently because more homeowners and lawyers are only now becoming familiar with the complicated health, insurance and legal issues involved, he added.

"There's people out there that are really sick. Trial lawyers aren't making that up." said Lang, who is co-chair of a toxic mold litigation group for the American Trial Lawyers Association.

According to the CDC's Web site, molds are found virtually everywhere, both indoors and outdoors, year round. Growth is encouraged by warm and humid conditions.

Mold claims tend to be more common across the warmer climates in the South, and have especially increased in Texas. In 2001, a jury there ruled that Farmers Insurance Group had to pay a family $32 million for damages related to a mold-infested home.

An appeals court last year reduced it to $4 million for actual damages to the home, but threw out the part of the award for mental anguish and punitive damages.

Insurance officials say the attention drawn by the case has led to the filing of similar lawsuits nationwide.

In some states, mold-related damages are now putting caps on claims or have excluded mold coverage from the policy. The high jury awards have also led to an increase in premiums, insurers say.

Changes in building codes in the 1970s to make homes more energy efficient and airtight had the effect of allowing less ventilation through a house that would dry out a wet wall or floor, which in turn may have led to more mold damage claims, said Chris McDonald, an Overland Park, Kan. an attorney who has defended a landlord and an architect in mold lawsuits.

In recent years, more contracts with heating and cooling engineers have included disclaimers releasing them from responsibility for mold-related damage, especially on larger-scale projects, McDonald said.

The EPA recommends that any mold damage on hard surfaces should be cleaned up immediately with detergent and water. Absorbent materials such as ceiling tiles or carpet that become moldy may have to be replaced.

"Prevention and control is the key," said EPA spokeswoman Cathy Milbourn.