A survey of representative mold case law in Virginia illustrates that the "mold is gold" philosophy has found its way into Virginia. The following cases provide a glimpse into the sort of mold claims that have been brought in Virginia and why potential mold defendants should have cause for concern
Insurance and Commercial real estate professions may find Aetna Casualty & Surety Company vs. Hall & Associates of some interest.
In that case, pipes burst in an upstairs unit of a commercial condominium. As a result, the downstairs unit flooded, causing property damage. Aetna Casualty & Surety insured the downstairs condominium and paid the downstairs condominium owner for the property damage. Aetna Casualty & Surety then sought damages from the upstairs condominium owner for failing to remedy the damage to his unit, and thereby causing further damage (mold and mildew) to the downstairs condominium.
Prior to trial, the upstairs condominium owner argued that he was not liable as a matter of law because he was not responsible for the damage resulting from the accidental or natural causes of the pipe bursting. The court disagreed. It found that the condominium owner could be found liable for the damages and allowed the case to continue.
In another Virginia case, Virginia Employment Commission vs. Century Construction Company, the Virginia Employment Commission (the "VEC") notified the construction company, that built its branch office, of leakage and moisture in its building. The company made several repairs, but the problems continued. The VEC alleged that the leaks eventually destroyed parts of the interior and exterior walls.
The VEC notified the construction company of these problems, but the construction company denied liability. Further, the VEC indicated that it continued to investigate the building's structure and evacuated the building due to the health concerns raised over the growing mold in the building. Soon after evacuating the building, the VEC brought suit against the construction company alleging that the defects in the building were a breach of the construction contract. Ultimately, the parties settled the dispute for $400,000.
In another telling Virginia case, Gonella vs. Lumbermens Mutual Casualty Company, the plaintiffs contracted with a construction company to install a new roof following a claim to their insurance company ("Lumbermens") for earlier roof damage. After a hail storm, plaintiffs reported a new leak to Lumbermens and the construction company.
The construction company made a series of repairs to the roof, but in the meantime water leaked into the plaintiffs' basement. The plaintiffs reported a mold odor to Lumbermens. Independent mold testing conducted by the plaintiffs indicated the presence of various species of mold in the basement. Lumbermens then arranged for an independent cleaning company to conduct mold remediation on the property.
Despite the remediation, mold persisted in the basement. Toxicologists recommended that plaintiffs leave the property and remain off the property until appropriate remediation could be done. An inspection conducted on behalf of Lumbermens confirmed the existence of mold, but the inspector concluded that the mold did not pose a danger to the plaintiffs. Lumbermens then denied plaintiffs earlier mold claims, stating that the property damage was due to infiltration of ground water into the basement as opposed to a roof leak.
Plaintiffs filed a breach of contract action against Lumbermens, a bad faith denial of plaintiffs' policy coverage by Lumbermens, and negligent mold remediation.
In the negligent mold remediation claim, plaintiffs alleged that Lumbermens failed to initially ascertain the nature and extent of the mold infestation before authorizing the remediation of the mold. The plaintiffs further alleged that Lumbermens failed to make sure that their remediation agents conducted remediation in a safe manner. The plaintiffs sought recovery for their property damage and personal injuries. The defendants sought to have all of the plaintiff's claims thrown out. The court, however, sided with the plaintiff. Accordingly, the litigation of this case continues.
Finally, in Bay Point Condominium Association, Inc. vs. RML Corp., 57 Va. Cir. 295 (Norfolk Cir. Ct. Jan 28, 2002), the Bay Point condominium association sued RML for damages arising from alleged construction defects in the construction of condominiums. RML used synthetic stucco or Dryvit in its construction of the exterior of the condominiums. Plaintiffs alleged that because of the use of synthetic stucco, foreseeable water intrusion was unable to drain out of the walls. According to the plaintiffs, this water damage caused rotting, mildew, and mold. Prior to trial, RML settled plaintiffs' property damage claim for $1,400,000.
As you can see, mold litigation is rampant. Whether you are a buyer, a builder, or a homeowner, make sure to know where your responsibility starts and ends if such a case were to come your way.
For Parts I and II of this series, click on the related articles below.
