Family blames contractor for mold-infested house
PUBLISHED IN MASSACHUSETTS LAWYER'S WEEKLY
MARCH 10, 2008

Detailed Information

• Type of Action: Tort
• Name of Case: Family blames contractor for mold-infested house - Defendant says damage was caused by defect in gutters
• Verdict or Settlement: Settlement
• Date of Verdict or Settlement: 27-Jun-08
• Attorney for Plaintiff: Robert C. Autieri and Elise B. Hoffman for the plaintiffs.

Family blames contractor for mold-infested house
Defendant says damage was caused by defect in gutters

$650,000 settlement

In June 2000, the plaintiffs hired the defendant home-insulation contractor to install insulation behind aluminum siding of their house. The plaintiffs alleged that the contractor failed to follow accepted procedure and industry standards for installation of blown-in insulation in residential homes with aluminum siding by negligently cutting the aluminum siding on all four sides of the home.

The plaintiffs further alleged that, after negligently cutting and slashing the aluminum siding, the contractor failed to properly refit or replace it after the installation due to the cuts that were made. The result was the failure of the aluminum siding to lock correctly, thus creating gaps and openings in the siding throughout all four sides of the house.

Complicating matters, the contractor had drilled 200 holes through the house's clapboard four inches deep into the interior wall to blow in the insulation. After the insulation work was completed, the contractor failed to cap or close the circular holes made on all four sides of the house.

As a consequence of the negligent workmanship, rain, water and moisture seeped behind the aluminum siding of the house, saturating and damaging the clapboard, insulation and interior walls through the numerous open holes. As a direct result of the persistent water seepage and penetration, wetness and moisture developed, causing the perfect environment for the growth and development of dangerous mold and mold species behind the aluminum siding and within the walls of the home.

Within a short period of time after the installation of the insulation, the plaintiffs, a family of a husband and wife and three young children, began to experience numerous health symptoms of unknown origin or cause, including recurring sinus problems, chronic respiratory difficulties, fatigue, persistent coughing, severe headaches and swollen, itchy and watery eyes. The family's young children were also experiencing recurring ear infections and chronic nosebleeds requiring cauterization.

The plaintiffs first became aware of the persistent water seepage, with the resultant growth of mold, in March 2003 when they were renovating their kitchen. The entire back wall of the kitchen collapsed, revealing significant water damage, water-soaked clapboards, water-saturated insulation and rampant mold growth.

On being informed of the negligent installation work and resultant significant damage, the contractor initially argued that the damage was caused by defective gutters. Subsequently, the contractor, who refused to acknowledge that significant water damage and mold growth existed, hired a subcontractor to replace portions of damaged siding. The subcontractor, the plaintiffs alleged, negligently tore off portions of the aluminum siding and failed to property refit sections of the siding back onto the house, resulting in the subcontractor duct-taping sections of the siding in an attempt to refit it.

Eventually, the contractor put his liability insurance carrier on notice of the claim. After an investigation, the insurance carrier attempted to induce the plaintiffs to completely settle their property damage claims for $2,013. The plaintiffs refused and retained legal counsel.

Legal counsel retained physicians and medical experts to evaluate and treat the plaintiffs' medical and health issues and retained environmental experts to evaluate the house for mold infestation and mold growth. Environmental testing identified the presence and growth of numerous molds and fungi harmful to human health. The house was deemed to be uninhabitable, due to dangerous air quality and mold growth presence, and the plaintiffs were advised to vacate their home, leaving behind personal belongings, furniture and clothes that also had evidence of mold spore contamination.

The contractor, subcontractor and insurer claimed that the house had a pre-existing water and moisture problem. Aggressive discovery resulted in the acquisition of documents from the insurance company acknowledging that the contractor had negligently cut the house siding, causing water damage. It was further discovered that the insurance company had in its possession a report from a claims adjuster who had undertaken a complete evaluation of liability, causation and damages. When the insurer refused to produce the report, a motion to compel the report was filed. The report clearly demonstrated that the insurer was not only aware of the contractor's negligence, but was also aware that such negligence had caused significant water damage and mold growth.


The plaintiffs served the insurance company with an extensive demand letter alleging violations of G.L.c. 176D, Sect. 3(9) and G.L. c. 93A for unfair settlement practices and acts in the business of insurance and alleging that the insurance company's failure to promptly, reasonably and fairly settle the claim had caused additional damage to the house, making it uninhabitable.

Shortly thereafter, the parties agreed to enter into mediation. An initial mediation session was not successful, resulting in the plaintiffs continuing the matter to trial. The defendants requested a second mediation session at which senior insurance representatives were in attendance. After a full second day of mediation, a settlement with all defendants was reached in the amount of $650,000.

A significant component of the settlement was the agreement of the two lending institutions that held mortgages on the mold-infested, uninhabitable house to take a discounted lump-sum payment in full satisfaction of the mortgages.

The proceeds from the settlement allowed the plaintiffs to purchase a new home.

• Type of action: Negligence & tort
• Injuries alleged: Personal injuries, loss of home and all personal belongings
• Name of case: Withheld
• Court/case no.: Essex Superior Court, no. withheld
• Tried before judge or jury: N/A (mediated)
• Name of mediator: John P. Ryan, Sloane & Walsh, Boston
• Amount of settlement: $650,000
• Date: June 27, 2007
• Most helpful experts: Dr. Christine Oliver; Kenneth Weinberg, Ph.D.; Gordon Mycology Laboratory, Inc.
• Attorneys: Robert C. Autieri and Elise B. Hoffman, North Andover (for the plaintiffs)