Source: http://www.arobertsonlaw.com/articles/asbestos-new-millennium
Timestamp: 2019-04-21 22:28:34+00:00

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Thirty years ago it was asbestos. Then lead, latex and MTBE became the next generation of toxic tort litigation. Today, toxic mold cases are mushrooming and have blurred the traditionally separate fields of toxic tort, construction defect and insurance bad faith litigation. According to a recent Wall Street Journal article, Farmers Insurance, which has 7% of the U.S. homeowners insurance market, estimates that mold claims will cost it $85 Million in 2001 alone. That estimate was made prior to the $32.2 Million jury verdict in Ballard v. Fire Ins. Exchange. Michael Thompson, Chief Executive Officer of Engineering & Fire Investigations, a Houston-based subsidiary of claims specialist GAB Robins North America, Inc., says his firm did not have a single microbiologist on its staff a year ago. Last month, it hired its ninth. "It has inundated that residential marketplace. It's going to wind up being a multi-million dollar industry for us, and it was zero none months ago." A recent headline in Lloyd's Insurance Today on June 12, 2001 reported that rising toxic mold claims in the U.S. are predicted to drive homeowners' insurance premiums up by at least 10% by the fall.
Some commentators have suggested that toxic mold may be analogous to asbestos property damage or lead paint claims, but that mold-related personal injury claims are dissimilar to asbestos personal injury claims of decades ago. John J. Delany, III of Delany & O'Brien in Philadelphia agrees that toxic mold is a very serious toxic tort, but argues that there are several factors that militate against analogizing mold with asbestos personal injury claims. According to Mr. Delany, these factors include weak medical causation evidence, lack of published exposure standards, non-repetitive corporate defendants and the current failure of the plaintiff's bar to mobilize.2 Although it is unclear whether mold will equal the $21.6 Billion paid to date by the insurance industry for asbestos claims, what is clear is that recent jury verdicts around the country have "rung the bell," attracting the attention of insurers, lawyers, doctors, the media and the public.
Personal injuries caused by exposure to microbiological agents created from chronic water intrusion into the building envelope fall into the category of "Building Related Illness" (BRI). BRI differs from "Sick Building Syndrome" (SBS) in that there is an identifiable link between the causative agent discovered in the building and the illnesses of those exposed. Conversely, SBS occurs when at least twenty percent (20%) of a building's occupants complain of particular discomforts while inside the building, and the discomforts are alleviated upon leaving the building, but there is no discoverable link between the building source and the problems encountered.3 However, in the case of microbiological contamination, a very distinct link can be found between toxic mold and the occupant's illnesses.
Fungi commonly found in buildings with chronic water intrusion problems include Stachybotrys, Aspergillus, Penicillium, Trichoderma, Fusarium and Chaetomium among others. An excellent microbiological glossary can be found at http://www.emlab.com. or at http://www.dehs.umn.edu/fungus/myco.html.
Several mold species, including Aspergillus, Fusarium, Penicillium and Stachybotrys can produce a wide variety of nonvolatile chemicals, commonly referred to as mycotoxins. Stachybotrys alone produces over 163 different mycotoxins. Between 1974 and 1981, the Soviet Union and its client states in such Cold War sites as Afghanistan, Laos, and Kampuchea (Cambodia) were believed to have used neurotoxins from Stachybotrys as a biological weapon.5 Trichothecene mycotoxins are a very large family of chemically related toxins produced by various species of Fusarium, Trichoderma, and Stachybotrys, among others. This family of mycotoxins causes multiorgan effects including emesis and diarrhea, weight loss, nervous disorders, cardiovascular alterations, immunodepression, hemostatic derangements, skin toxicity, decreased reproductive capacity, and bone marrow damage. [Id.] Unlike allergens, mycotoxins elicit a toxic response in virtually all individuals who come in contact with them. Aspergillus Flavus, a common indoor fungus, produces aflatoxins, notoriously potent animal carcinogens. Penicillium, while unable to produce aflatoxin, may produce more than 100 different classes of mycotoxins.
Stachybotrys chartarum (aka atra) one of the most notorious mycotoxin- producing molds, has received much publicity in both the media and in high profile closings of public and private buildings, schools, courthouses and hospitals. Various species of "Stachy," as well as Fusarium, can produce macrocyclic trichothecenes, which have potent adverse health affects on the immune system, as well as protein synthesis. Stachybotrys chartarum produces five different trichothecenes, which are both dermotoxic and cytotoxic.
A wide variety of symptoms have been attributed to the toxic effects of mold. Symptoms such as fatigue, nausea, headaches, respiratory distress, and eye irritation have been reported. Some of the symptoms are "non-specific," such as joint or muscle pain, inability to concentrate and chronic fatigue.
According to the recently revised NYCDOH guidelines, infants (less than 12 months old), persons recovering from surgery, or people with immune suppression, asthma, hypersensitivity pneumonitis, severe allergies, sinusitis, or other chronic inflammatory lung diseases may be at greater risk for developing health problems associated with certain fungi. According to these guidelines, such persons should be removed from the contaminated area during remediation. Persons diagnosed with fungal related diseases should not be returned to the affected areas until remediation and fungal testing are complete.
No matter what legal theory is being relied upon, frequently the most difficult element will be causation. Thus, it is essential to conduct thorough and competent testing of the patient's environmental surroundings. When performing a site investigation, the inspector should be a properly trained industrial hygienist, and should not arbitrarily rely upon air samples to determine the existence of fungi. Results from air testing alone can be confounding and may inaccurately represent the true conditions of the indoor air environment. Fungal spores often fluctuate widely over the course of a day, and a single air sample reflects only a momentary "snapshot" condition. Certain fungi, such as Stachybotrys, have sticky spores and are rarely airborne absent some type of physical disturbance. In these cases, air sampling will be prone to false negative results, and never should be relied upon to rule out contamination.
As previously discussed, the AIHA believes that air sampling is not an infallible means of determining the existence of a fungal problem and must be coupled with a detailed inspection. This often includes performing destructive testing to remove water damaged drywall to inspect the back of gypsum wallboard, wood framing members and insulation. However, care must be taken to warn and protect both the investigators and the occupants of the building from unintentional contamination from destructive testing. Proper personal protective equipment ("PPE's") should be worn by testing personnel, including disposable Tyvex coveralls with hoods, latex gloves under work gloves, HEPA respirators and disposable shoe coverings.
The use of investigative equipment, such as borescopes, to view interstitial spaces inside wall and ceiling cavities, and duct work may be helpful to visually identify mold growth. Additionally, a moisture meter is typically used to identify areas suspected of chronic moisture intrusion before destructive testing is performed and to monitor the process of drying damaged buildings.
Information on airborne fungi generated from collecting air samples with subsequent culture on agar media has several limitations. According to AIHA, air samples impacted on agar media can greatly underestimate the total propagule numbers present for three reasons: (1) decline in propagule viability with age and exposure to ambient environmental conditions; (2) choice of agar medium; and (3) damage to propagules during sampling. Fungal spores decline in viability from the moment they are produced. Spores of Stachybotrys Chartarum (atra) decline in viability very quickly. Hence, according to the AIHA, the finding os Stachybotrys from air samples collected on culture media must be treated differently than a finding of a Penicillium species. In general, the numbers of propagules determined by culture are substantially less than those determined by direct methods.
A proper investigation should include both viable (culturable) and non-viable fungal particles. Therefore, when collecting air samples, collect both types of particles. Viable sampling is usually performed using an Anderson or similar impaction sampler which pulls air across an agar plate at a flow rate of 28.3 liters per minute. Small particles are deposited upon this plate, which is subsequently incubated and the resultant colonies identified and enumerated microscopically. Spore counts are then converted to the number of colony-forming units ("cfu's") per cubic meter of air sampled. There are a variety of different types of agar which can be used, depending on the type of fungi being sampled. No one agar is ideal for all types of fungi. Malt extract agar (MEA) is a good general purpose agar for screening. When sampling specifically for Stachybotrys, cornmeal agar (CMA) or Czapek cellulose agar (CCA) are more suitable.
Non-viable particles are typically collected using a spore trap sampler, such as the Burkhardt or a slit impaction device, including the AIR-O-CELL Bioaerosol Cassette. Air is pulled through the sampler and particles deposited on a grease-coated glass slide. The samples are then microscopically examined and the total number of spores per cubic meter determined. Tentative identification of many types of spores can also be made, though typically only the genus (i.e., Penicillium) can be ascertained.
When conducting any type of air sampling, samples must also be collected outside the building of the ambient air so that a comparison between the genus and number of spores found indoors can be compared to those found outdoors.
The AIHA offers accreditation to microbial laboratories through its Environmental Microbiology Laboratory Accreditation Program (EMLAP).
There are no "official" standards or guidelines for fungal or bioaerosols. Some researchers have expressed an opinion that 100-250 cfu's are acceptable, provided no opportunistic fungi are present. The same range is also used by the U.S. Public Health Service, Federal Employee Occupational Service (Region III). A range of concentrations proposed by the World Health Organization and Health Canada suggests that microbial concentrations below 50 cfu for a single species (other than outdoor common fungi), 150 cfu for a mixture of species reflective of the outdoor air spores, or 500 cfu during the summer for common outdoor fungi (such as Cladosporium) are acceptable. There are other ranges (called background numbers or guidelines) used by organizations such as the American Conference of Governmental Industrial Hygienists (ACGIH) and OSHA. A bill currently pending before the California Legislature (SB 732-Ortiz) seeks to authorize the CDHS to establish permissible exposure limits (PEL's) for exposure to molds, as well as require disclosure in the sale and rental of property by an owner when mold has caused adverse health conditions, as well as license persons involved in the investigation and abatement of mold.
Since there are no governmental established guidelines yet to follow regarding airborne fungi, indoor results must be interpreted with respect to the control samples. In general, mechanically ventilated buildings should have indoor fungal counts that are lower than those found outside. In addition, the species found inside should be similar to those identified outside the building. A situation should be considered unusual when the fungal levels inside are an order of magnitude or greater than those found in the outdoor control sample. Further, the presence of any slimy-spored toxigenic fungi, such as Stachybotrys chartarum and Fusarium moniliforme, should be considered unusual, and may suggest an indoor contamination source. The consistent detection of some fungi, such as Aspergillus or various species of Penicillium, could indicate water damage and subsequent fungal amplification.
Undoubtedly, the success of any microbiological contamination case will revolve on the admissibility and credibility of the expert witnesses. Experts in these type of cases can include mycologists, microbiologists, industrial hygienists, neuropsychologists, immunologists, toxicologists, and occupational and environmental medicine doctors.
4. whether the theory is generally accepted.
3. whether the theory or method in question was implemented according to proper scientific procedures.
Regarding statistical techniques, Kelly/Frye will only apply if the statistical technique is "scientific", meaning whether it appears in both name and description to provide some definitive truth. People v. Leahy (1994) 8 Cal.4th 587. The statistical technique must also be "new" for Kelly/Frye to apply. "New" means new to both law and science. People v. Stoll (1989) 49 Cal.3d 1136. Kelly/Frye will not apply if the expert is merely stating an opinion based upon commonly used statistical formulae. Texaco Producing, Inc. v. County of Kern (1998) 66 Cal. App.4th 1029.
Despite certain commentator's opinions to the contrary, the application of the Daubert factors to toxic molds cases has rendered conflicting results, to say the least. On May 9, 2001, the trial judge in Ballard v. Fire Ins. Exchange, No. 99-05252 (Tex. Dist. Ct.) granted the defendant's motion to exclude causation opinion testimony of the plaintiffs' medical experts. In Ballard, the only personal injury claim that was at issue was Ronald Allison's claim that he suffered cognitive dysfunction as a result of mycotoxin exposure. Although the trial judge initially denied the defendant's motion, on the first day of trial he reversed himself and granted Farmer's motion, relying upon Merrell Dow Pharmaceuticals v. Havner, 953 S.W.2d 706 (Tex. 1997). In Havner, the Texas Supreme Court excluded the plaintiff's expert testimony that the drug Benedictine causes birth defects when ingested by expectant mothers. Under Havner there must be multiple epidemiological studies where the 95% standard is met and there is more than a doubling of the risk of injury when exposed to the toxic substance. This means that if the studies were duplicated, 95% of the scientists duplicating the study would get the same results.
Just two days prior to the trial judge's decision in Ballard, the Delaware Supreme Court upheld a jury verdict of $1 Million for personal injuries sustained by one tenant and an award of $40,000 for personal injuries sustained by her roommate, against their landlord for failure to maintain their mold contaminated apartment. New Haverford Partnership v. Stroot (Mealey's Litigation Report: Mold, Vol. 1, #6, Page 4). The irony of the Stroot decision is that the Delaware Supreme Court ruled that the testimony by the very same experts who were excluded in the Ballard case was properly admitted by the Stroot trial court. The medical experts involved in both cases were Eckardt Johanning, M.D., an occupational and environmental medicine doctor, and Wayne Gordon, Ph.D., a board-certified neuropsychologist.
The Delaware Supreme Court held that the voire dire established that the methodology employed by the plaintiffs' experts was reviewed by peers and generally accepted in the scientific community and that the trial court properly exercised its gate keeping function in admitting the plaintiffs' experts' testimony. In addition to the reliability of the plaintiffs' experts, the defense also objected to the admission of expert testimony on causation. The landlord contended that the plaintiffs' experts conducted all of their investigations and obtained all of their physical evidence in 1994, despite the fact that the last time the plaintiffs occupied the apartment was in 1992. The landlord argued that, since there was no testing in 1992, plaintiffs' experts had no reliable basis on which to opine about the 1992 conditions. The Delaware Supreme Court rejected this argument, stating "This argument ignores the fact the plaintiffs were able to provide factual information about the conditions in 1992; that Stroot's increased health problems began in 1992; and that the water damage and mold levels observed in 1994 were the result of long term water problems in the building. While the experts' opinions about the 1992 conditions may not have been as well supported as their opinions about the 1994 conditions, they were still within the realm of scientific reliability and the trial court acted within its discretion in allowing them."
The clear conclusion from review of the Ballard and Stroot cases is that there have been inconsistent rulings concerning the admissibility of testimony by the very same experts in two different Daubert jurisdictions. Accordingly, too much emphasis should not be placed upon the trial judge's decision in Ballard, particularly in jurisdictions other than Texas.
For those jurisdictions which follow the expert admissibility standard established in Frye v. U.S. (1923) 293 F.1013(D.C.Cir.), a review of the Florida Court of Appeal's decision in Centex-Rooney Construction Co., Inc. v. Martin County, No. 96-2537, Fla. App., 4th Dist. is warranted. The most notable portion of the appellate decision to uphold the judgment was the affirmation of the trial judge's admission of expert testimony by two doctors (including Eckardt Johanning, M.D.) suggesting the existence of a health hazard stemming from the presence of toxic molds in the building. The appellate court found that the County had met its burden under Frye v. U.S., noting that both experts testified about numerous publications accepted by the scientific community recognizing the link between toxic mold exposure and adverse health consequences. On August 21, 1998, the Florida Supreme Court declined to hear the defendant's appeal of the $14.1 Million verdict in favor of Martin County, Florida. Following the Supreme Court's denial of the petition for review, Centex-Rooney Construction co. paid the County a total judgment exceeding $17.3 Million.
In recent years, the "absolute pollution exclusion" that began appearing in commercial general liability (CGL) policies in the mid-1980's, has been used by some insurers to deny claims resulting from mold damage. The customary pollution exclusion provides that coverage doesn't apply to "bodily injury or property damage arising out of the actual, alleged, or threatened discharge, dispersal, release, or escape of pollutants at or from premises you own, rent or occupy." Pollutants are generally defined as "any soluble, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids alkalis, chemicals and waste."
Contrary to the divergent opinions found across the country interpreting coverage for mold claims under a CGL policy, coverage generally exists under a homeowner's policy for property damage caused by mold contamination.15 Mold is covered by the homeowner's policy if it is the result of a covered loss. Further, when there is a covered loss, a mold exclusion is not applicable. Pipe leaks, rain damage and accidental discharge or overflow of plumbing fixtures are examples of covered losses.
In Home Insurance Co. v. McClain, a Texas appellate court dealt with rain damage from a leaking roof. The leaking water collected and soaked the studs behind interior walls causing mold contamination to the home. The insurer argued that the policy barred coverage for loss caused by "mold or fungi" even if the mold was caused by water damage. The appellate court held that the insurer ignored that the ensuing loss provision in the policy was not limited by the mold and fungi exclusion. Although the water damage was not the result of the mold and fungi, it was the result of a defective roof. Thus, the application of the exclusion depends on the application of the ensuing loss provision. The court found that the loss that followed the water damage was caused by water damage. Therefore, the exclusion for fungi and mold damage did not apply.
The frequency of microbiological contamination cases being reported in the media and medical journals is also translating to published verdicts and settlements in legal publications. Because most of these cases involve a recovery for both property damage to repair and remediate the defective conditions, as well as for personal injury, it is difficult to extract an amount paid for each category of damage. However, there have been a number of cases reported over the past few years involving single family homes or condo units, which provide a good idea of the value of such claims on a per unit basis.
In September of 1999, a lawsuit was filed on behalf of 65 former employees of Forest City Enterprises alleging over $100 million in damages for the company's alleged requirement of employees to renovate two apartment projects in California that contained asbestos, toxic mold and lead paint, without any safety equipment or disclosing the presence of these hazardous materials.
In December 1997, a $14 Million judgment was affirmed by the Florida Court of Appeal against the contractor of the Martin County Courthouse for sick building syndrome and construction defects. In April of 1996, an Indian River, Florida jury awarded Martin County $11.5 million against a construction manager and three surety companies. The county alleged that two buildings evacuated in December 1992 suffered from construction defects, which resulted in leaks to the building's exterior skin and problems with the air conditioning. Water intrusion and high humidity fostered the growth of toxic molds and mildew in the buildings. It is important to note that this jury verdict only dealt with property damage and did not include any personal injury claims, which were the subject of separate cases.
The trial judge reduced the jury's award by $2.75 million, reflecting the amount received by the county in pre-trial settlements with other defendants. The court entered an amended final judgement for $14.2 million, including $8.8 million in damages and $5.4 million in prejudgment interest.
1. Wall Street Journal, June 6, 2001.
2. Insurance Coverage Claims Handling Strategies, Litigation Forum, Inc., June 2001.
4. EPA, Building Air Quality, A Guide for Building Owners and Facility Managers, Appendix C, 141 (Dec.1991).
5. Textbook of Military Medicine, Medical Aspects of Chemical and Biological Warfare, Office of the Surgeon General, Department of the Army, United States of America, p. 656 (1997).
7. Molds, Toxic Molds and Indoor Air Quality, California Research Bureau, Calif. State Library, CRB Vol. 8, No. 1, March 2001.
8. New York City Department of Health (NYCDOH), Guidelines on Assessment and Remediation of Fungi in Indoor Environments (April 2000) www.ci.nyc.ny.us/html/doh/htlm/epi/moldrpt.1.htlm1#exec.
10. American Industrial Hygiene Association (AIHA), Field Guide for the Determination of Biological Contamination in Environmental Samples (1996).
12. National Multi-Housing Council, "Mold in Apartment Buildings" (Jan. 2001)www.nmhc.org>.
13. Miles & Stockbridge, "Are Mold Claims Excluded from Your CGL Policy?," Mealey's Litigation Report: Mold, Vol. 1, #3 (March 2001) /www.mealeys.com>.
14. Stillman v. Travelers Insurance Co., Nos. 93-5245 and 94-4113, (11th Cir.1996); See, Mealey's Emerging Toxic Torts, Vol. 5, #7 (July 12, 1996), Document No. 15-960712-020 www.mealeys.com.
18. Tri-Service Reference No. S99-09-19; Jan Hickenbottom v. Raquet Club Villa HOA, VCSC CASE NO. SC 020 526.
19. Confidential Report for Attorneys, CRA No. 10272, 1998 Issue, pp. 12-54; Doe Homeowners v. Roe Builder.
20. Confidential Report for Attorneys, CRA No. 9855; 1988 Issue; pp. 08-76; Jacqueline Berry, et. al. v. Mission Terrace HOA, et. al., ACSC CASE NO. H-182260-5.
22. Confidential Report for Attorneys, CRA No. 8795; 1997 Issue; pg. 10-53; Doe Homeowners v. Roe Seller, et al.
23. Stroot v. New Haverford Partnership, No. 95C-05-074-HLA, 1999 WL 753916 (Del. Super. Ct. May 11, 1999.
24. Moller v. Atherton Homeowners Assoc., No. BC 161657 (L.A. Co. Super. Ct.).
25. Ballard v. Fire Ins. Exchange, (Mealey's Litigation Report: Mold, Vol. 1, #6, Page 6).

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