Mold spawning litigation

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Mold spawning litigation

By Tony Quesada

The Business Journal of ville

http://msnbc.msn.com/id/11320176/

Updated: 7:00 p.m. ET Feb. 12, 2006

JACKSONVILLE -- Ten years ago lawyer Freed had never

litigated a case related to mold damage.

Last year, he filed about a dozen mold-related lawsuits for

plaintiffs and represented about an equal number of defendants in

such cases. He expects both numbers to rise this year.

Twenty percent to 30 percent of his cases now involve mold, said

Freed, the ville-based managing partner for the Florida

offices of Brennan, Manna & Diamond LLC. The demand for mold

litigators is high, and the only thing limiting how much of his

caseload focuses on it is his preference to maintain a diversified

practice.

" There's room for a mold litigation boutique firm in ville, "

he said.

Mold litigation is more than a decade old, but it picked up steam

after 2000. A spate of high-profile cases and large awards attracted

media attention, which in turn created public awareness leading to

more litigation.

In many ways the market for mold inspection and removal, which

continues to grow without a peak in sight, owes its prosperity to

the increased concern -- some would say hysteria -- for health and

liability arising from litigation.

By some accounts, the total money paid to mold plaintiffs through

trials or from settlements exceeds that resulting from asbestos

cases.

The largest recent case concluded in October 2005 in California when

a lumber company settled with a plaintiff for $13 million. That

combined with settlements from co-defendants brought the case's

total to $23 million.

In 2003, a class-action suit in Washington state against a paint

maker ended with a $55 million settlement for 5,000 state residents

and a $107.5 million settlement for national members of the class.

A Texas jury in 2001 ordered an insurance company to pay a couple

$32 million, although the award was reduced to $4 million on appeal.

And in 1996 in Florida, County was awarded $14.2 million in

its lawsuit against a construction manager and several insurance

companies involved in building its county courthouse.

Meanwhile, more lawyers are getting involved in mold litigation, and

the rise in mold torts has fueled a cottage industry for those who

provide expert testimony on both sides of such cases.

Lipsey, a former toxicology professor who has taught at the

University of Florida and the University of North Florida, gave that

up in 1986 to be a full-time consultant. Lipsey, whose office is in

Downtown ville, bills himself as the only mold toxicologist

with a Ph.D. consulting on mold litigation in the U.S. While his

cases involve many kinds of toxic substances, his experience in mold

mirrors the trend in that area of litigation.

In the 1980s and 1990s, Lipsey worked two or three mold cases a

year. That number jumped to about 20 by 2000 and went up again to

about 30 by 2002. Mold litigation now makes up about 60 percent of

his total workload, which is around 100 cases a year, and he doesn't

see it dropping soon.

" It's going to keep growing, " he said, " but it's going to keep

growing smarter. "

Many working in mold litigation concede the rise in lawsuits and the

number of lawyers filing them is partially driven by the opportunity

for a large payday.

" More and more lawyers, " Freed said, " are willing to take the chance

of getting involved in something they may not be totally familiar

with in hopes of getting a big verdict. "

But he and others also point to newer construction and design

methods.

" Buildings are not made as well. They use a lot of particle board, "

Lipsey said. " fir, when it gets wet, will dry out fine. When

particle board gets wet, it gets saturated and becomes a breeding

ground for mold. "

Another problem, Freed said, is that many " newer buildings suck. " By

that he means that some houses and buildings have air-conditioning

systems that fail to maintain a higher or equal pressure inside than

the pressure outside, resulting in drawing in warm, hot air.

As an example, Freed cited one of his cases that ended in September.

He won a $475,000 judgment for a company that sold two newly built

hotels in ville at a big loss because they were infested with

mold before they opened.

The court concluded that the main cause was improper ventilation

system design by the subcontractor handling that part of the

construction.

Whatever the reason, there are many who say mold litigation is out

of control. Those worried about its economic effect became so

bothered that the U.S. Chamber of Commerce's Institute for Legal

Reform held a conference in July 2003 on " The Growing Hazard of Mold

Litigation. "

Copland, director of the Center for Legal Policy at the

Manhattan Institute, who was one of the event's main panelists, said

there is good cause for concern.

" The [American Bar Association] journal called it black gold, the

next asbestos, " Copland said. " Unlike asbestos, which is gone from

the marketplace, mold litigation could go on forever. "

Copland argues that because mold is so naturally prevalent

and " virtually impossible to stop, " putting liability on builders

and property managers is tantamount to a " substantial tax " on

renting an apartment or buying a home.

" How these cases are handled is going to have a substantial impact

on the cost of housing, " he said.

The main outcome from the 2003 conference was a report arguing that

science does not support claims that mold can be toxic.

" Since then, the state of science has buttressed what we said in our

paper and at the panel, " Copland said. " The claims of mold toxicity

are provably wrong and have been rejected by the scientific

evidence. "

Media attention on mold litigation seemed to peak a few years ago in

the wake of several high-profile cases.

In 2003, the Insurance Information Institute estimated 10,000 mold-

related lawsuits were pending in the country. But since then none of

the organizations opposing the rise in such cases has kept a tally

on how many there are at a given time.

Nevertheless, those involved in mold litigation say the volume of

active cases is either holding steady or growing.

Bryson, a North Carolina lawyer who led a national conference

on construction defects and mold litigation in November 2005, said

the field is poised for an uptick. All that's needed for a dramatic

change is for researchers to identify more links between mold and

health problems.

" If the science can catch up to the claims, I think you'll see an

increase in cases, " Bryson said. " What we're waiting for is more

science to help prove the personal injury claims. "

On the other hand, some people see changes in the insurance industry

reducing mold litigation. Many of the large early mold lawsuits

involved claims of bad faith by insurers, but since then policies

have been changed to exclude mold coverage.

O'Neal-Coble, an Orlando lawyer who tried the County

Courthouse case, said bad-faith claims present a chance for greater

damages. Such claims will continue under older policies but they'll

become less common and less successful.

" It takes a while for policy changes to go into effect, " she

said. " You'll see fewer bad-faith claims stick. "