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Mold Cases Dry Up

By Annie Gausn | Jul. 2, 2006

Law Office Management

Jul. 2, 2006

Mold Cases Dry Up

A half-dozen years ago, mold litigation seemed like the next big thing in torts. But it doesn't seem like that anymore.

By Malaika Costello-Dougherty
      Toxic mold was touted as the new asbestos. What happened?
      Five or six years ago mold litigation seemed like the next big thing in torts, with millions of dollars in damages just waiting to be claimed. But the occasional multimillion-dollar judgment notwithstanding, these cases have, on the whole, turned out to be a lot more problematic than plaintiffs lawyers initially thought.
      For one thing, in 2003 California insurance companies began excluding mold-related losses, which put many defendants' deep pockets out of range. Also, the causal connection between mold and long-term personal injury remains less than definitive.
      "Several years ago everyone tried to jump on the mold bandwagon," observes Alexander Robertson IV, senior partner at Robertson & Vick in Calabasas. Now, he says, he can count on two hands the number of good lawyers in the country specializing in mold cases. Robertson shifted his practice away from homeowner claims some time ago, and now he represents owners of high-rise hotels and luxury condos who want to either sue contractors or avoid being sued themselves.
      In San Diego, attorney Jeffrey LaFave of LaFave and Rice is another mold specialist, focusing on landlords and developers. In more than 100 cases, he claims, he's never gone away empty-handed, with most verdicts bringing damages in the low six figures. This past April he won a case in San Diego Superior Court in which the jury found a landlord negligent for exposing two families to toxic mold and awarded more than $1 million in damages. (De Leon v. Morgan, No. GIC843565, filed 3/1/05.)
      "I'm getting far fewer claims, but they are better ones," says Michael Childress, chairman of the mold litigation group for the Association of Trial Lawyers of America. "All over the country insurance companies added mold exclusions. We try not to use the word mold; it's water damage."
      The Insurance Information Network of California tracks water-damage claims, and it reports that though the number of claims dropped by about half between 2000 and 2004, to approximately 70,000 cases, the average cost per claim rose by more than $1,000, to $5,074.
      "When you have a mold case, you're in for a fight," Childress says. "It's an expensive workup, with rigorous investigating of the client background and the source of contamination. Juries tend to buy it, or they don't."
      For defense lawyers, though, perhaps the most dangerous cases are the ones involving sick children. This was underscored last October in Gorman v. Crenshaw Lumber. In that case, a Southern California family reached a $22.6 million settlement against a lumber company and several other defendants after claiming that the brain damage their five-year-old son suffered when he was an infant was caused by inhaling toxic mold in their home.
      Now, all eyes in the world of mold litigation are turning to the Gulf states, where Hurricane Katrina caused so much damage. Robertson, for one, traveled to Mississippi with experts to check for mold damage in a Mississippi hotel. He predicts that the 2005 Gulf Coast hurricanes will spawn years of mold litigation-even if it's referred to as "water damage."

Annie Gausn

Daily Journal Staff Writer

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