By Steve Setliff and Matt Mazefsky

If you’re a contractor, property manager, real estate agent or homeowners association, you may be on the lookout for two primary categories of mold damage.

The first is property repair damages.  Plaintiffs pursue property damages by claiming that these entities were negligent in their design or maintenance of the property and that this negligence caused mold damage to the plaintiff's property.  Property damage liability includes the repair and removal of mold damage, as well as the correction of any construction defects.  Thus, if mold damage is limited to a small area, damages are minimal.  In the case of widespread mold, however, remediation often requires extreme measures -- such as the removal of walls...

...In addition to property damage, property owners may also sue based on their alleged mold-related personal injuries.  Thus far, mold-related personal injury claims have not been as successful as property damage claims.  The failure of personal injury suits is due in large part to the lack of science supporting the plaintiffs' allegations that mold caused the plaintiffs' injuries.

Proving Causation: The Defendant's Best Weapon
Causation is the single greatest hurdle for a claimant that seeks damages for mold-related personal injuries.  Plaintiffs seeking recovery for alleged mold-related injuries must establish two causation elements -- general and specific causation.  General causation requires the demonstration that toxic mold can generally cause the type of injuries that the claimant alleges.  Specific causation, on the other hand, requires proof that the toxic mold in question actually caused the injuries claimed by the plaintiff.

Despite some causation hurdles, although not all mold-related personal injury claims fail but many of them do.  Here are some suggestions for potential Targets: Improper handling of a toxic mold suit can result in large plaintiff's verdicts or settlements.  The cases further illustrate, that the risk of liability increases for potential mold defendants if they conceal mold contamination, oversee a haphazard mold remediation, or involve themselves in what the court may consider a misrepresentation of a mold problem.  For this reason, it is important that potential toxic mold defendants implement protocols to deal with toxic mold claims.

The protocols should involve the potential mold litigant taking action up front by initiating an inspection, and employing a remediation strategy.  This, in turn, reduces a plaintiff's ability to claim that a mold-defendant misrepresented himself or acted with the bad faith that may open the door to a large punitive damage award.

To help in a conservative remediation approach, the real estate professional should look to sources like the EPA and the residential mold remediation guidelines published by the New York Department of Health. (See Epa.gov; see also NYC.gov.)

As another illustration of a liability-limiting protocol, consider a property manager who knows of a mold infestation.  Before selling the property, the property manager should put the mold problem in writing and provide it to the homeowner.  He or she should also test the area and put the extent of the damage in writing.  This way, the property manager limits a plaintiffs' potential claim that the property manager tried to conceal knowledge of mold in bad faith.

Next, consider a situation where a real estate professional, such as a building owner or contractor, notices signs of possible water damage.  That real estate professional can protect his liability by recommending an expert evaluation of the water damage.  The real estate professional should not act as an expert themselves or give expert-like advice concerning the mold.

Instead, they should direct the prospective homeowner to an expert in the field (such as an industrial hygienist) who can then fully disclose to the homeowner any potential mold problems.  This way, the real estate professional reduces the homeowner's ability to claim that water damage was purposefully concealed.

Finally, in the interest of full disclosure, potential mold defendants should encourage prospective mold plaintiffs to educate themselves on mold in homes through sources such as the Environmental Protection Agency or OSHA.

In conclusion, mold-related claims are on the rise.  Such claims will likely continue to multiply in the future.  Potential mold defendants can, however, protect themselves by implementing mitigating protocols and seeking legal advice as soon as a potential mold claim surfaces.

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