How to Handle Mold Claims

By K. Michael Fandel

April 1, 2003
 

Mold in the lodging industry
In July 2002, Hilton Hotels closed its Kalia Tower at the Hilton Hawaiian Village when a cleaning attendant found mold in the building. Today, nine months later, the guestrooms are still closed, and Hilton has spent over $55 million on cleaning and refurnishing, over half the $95 million the company spent to build the tower in 2001.
 

Hilton is not alone. Over the last ten years, over 9,000 lawsuits have been filed in the United States and Canada alleging that "toxic" mold has caused property damage and personal injuries. These suits are increasingly targeted at employers and guest facilities, and mold litigation can generate staggering verdicts. Two years ago, a Texas jury awarded a family $32 million in a suit based on their alleged mold-related injuries.
 

The lodging industry is a potential target for employees or former employees claiming that contact with mold caused them injuries on the job. The large volumes of guests moving through hotel facilities can also generate injury claims. Downtime for buildings that require remediation, such as the Kalia Tower in Hawaii, can be devastating. While an office-based employer can temporarily relocate its business while a building is cleaned out, a hotel building is the business. As long as the building is closed, the hotel's revenue stops flowing.


Strong defenses to mold claims
Despite recent mold hysteria, the lodging industry should approach these claims with healthy skepticism. There are strong defenses to any mold claim, especially since mainstream scientists have found little reason to believe that naturally occurring mold can cause anything more than short-term allergic or irritant responses. Here are some important points to remember:

  • Most lawsuits are based on the alleged effects of "mycotoxins," the by-products generated by so-called "toxic molds" with scary names such as Stachybotrys chartarum, Aspergillus, and Penicillium. But the dose of mycotoxins that would be necessary to cause toxic responses in humans is far higher than those mycotoxins ever occur in a real-world environment.
  • The only known health effects of inhaled mold are allergic reactions (stuffy nose, watery eyes, wheezing) and exacerbation of pre-existing asthma. The U.S. Centers for Disease Control has found no proof of any causal link between mold and more serious health conditions such as pulmonary hemorrhage or memory loss.
  • The CDC has also debunked much of the mythology of "toxic mold" by determining that the exact species of indoor mold has little correlation with the potential health effects. In other words, there are no "bad" molds, and only individualized testing can determine which molds can cause allergic effects in any given person.
  • Mold is everywhere, and like most other substances that we inhale or ingest, our bodies metabolize and excrete it. Claims that mold has "built up" in one's body are based on a fundamental misunderstanding of human biology.
  • Long-term health effects show that mold is not the cause, since the effects of mold exposure end shortly after the exposure ends.

Although long-term health effects have not been linked to mold exposure, mold should not be ignored. It is an allergen and an irritant, and usually is a tip-off of an underlying moisture problem that could cause structural damage, as well as being unsightly and often emitting an unpleasant odor.
 

How counsel can help
Hotels with mold problems can benefit from the advice of experienced legal counsel. In particular, counsel can address issues such as:

  • Whether a mold problem is serious enough to justify closing a facility before health problems begin to surface
  • How insurance claims should be made to ensure maximum coverage under property and liability policies
  • Once employees or guests begin complaining of health effects, how those complaints should be handled to minimize the possibility of lawsuits or disability claims
  • After employee disability claims are filed, how best to handle those claims to reduce downtime and to ensure that additional claims are minimized
  • After lawsuits are filed, which experts should be retained to investigate and rebut the speculative science that plaintiffs' attorneys will seek to present
  • In litigation, what strategies should be pursued to seek dismissal of claims before they are allowed to reach a jury that may not embrace the scientific defenses to such claims

Indoor mold exposure has the capacity to wreak havoc on the lodging industry. The best defense is education and preparation. Strong legal and scientific defenses to mold claims exist, and hotels should not be coerced into paying claims by aggressive plaintiffs' attorneys threatening to launch pseudo-scientific litigation.
 

If you need assistance handling a mold claim or mold problem, please contact K. Michael Fandel at (206.340.9693 or mfandel@grahamdunn.com).