4 TortSource 1 (2001-2002)

handle is hein.journals/tortso4 and id is 1 raw text is: Vol. 4, No. 1
Fall 2001

of                                               American Bar Association
of the Tort and Insurance Practice Section

Causation and Damage.-Ls
inMold Litgatio
Raymond R Boucher
any firms are banking that mold will be the next asbestos. Indeed, litigation-support firms
are also placing a similar bet. Mealey Publications, a firm that became known to asbestos prac-
titioners through its Mealey's Asbestos Reporter, is now branching into a similar reporter for mold
litigation. Is this where your firm needs to go? Is mold the next asbestos? While getting in on
the ground floor certainly has its attractions, you do not want to overburden your practice with
costly cases that can be causation nightmares.
There are similarities and differences between mold and asbestos litigation that are reveal-
ing. In the infancy of asbestos litigation, there were many of the same causation questions that
are asked today in the mold cases. However, striking differences are important to note.
Plaintiffs' attorneys in asbestos litigation were always dealing with a manufactured product.
While it may certainly be a result of negligent construction, mold is not a product, nor is it a
component part of a product. Asbestos was a desired component part of products, and mold
is not. Because American companies were dealing with asbestos as far back as the turn of the
century, these companies had a wealth of information and studies relating to asbestos and its
health effects. These studies were the first to link asbestos with interstitial fibrosis (scarring of
the lungs), pleural thickening, and, eventually, cancer. Mold fails to enjoy such smoking-gun
evidence because the usual defendants in these cases are builders or building owners who typ-
ically never contemplated mold infestation.
Moreover, because a building is typically not considered a product (notwithstanding
Californias Kriegler v. Eichler, 269 Cal. App. 2d 224 (1969), where mass-produced housing is
considered a product for purposes of strict liability), strict liability is usually unavailable as a
theory of recovery Depending upon your client (whether a tenant or a building owner), neg-
ligence as regards property damage and fraud are typically the only springboards for recovery
~continued on page 6
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0<
05

Insurance Coverage Issues
in Mold Cases
Gene A. Weisberg

1!Lene er damage occurs, an early ques-
t on   arises is Who will pay for the dam-
ge?  The usual corollary is What will
insurance pay? When mold damage is
involved, several insurance coverage issues
are raised. In answering questions, both
first- and third-party insurance should be
evaluated.
First-Party Property Insurance
Insurance coverage for property dam-
age from mold depends on what damage
has occurred and whether causes of loss
other than mold are involved. Although
most property policies exclude loss from
mold, other contributing causes of loss
may give rise to coverage for at least some
of the damage.
A typical homeowners policy insures
against risks of direct loss to the property
described. The policy excludes loss caused
by, among other things, mold, wet or dry

rot. However, if water damage from a
plumbing, heating, air conditioning, or
automatic sprinkler system or from a house-
hold appliance ensues, the water damage is
covered--the cost of fixing the system or
appliance is not covered, but the resulting
water damage is. In commercial property
insurances against all risks of direct physical
loss, similar provisions are typically present.
If the efficient proximate cause is some-
thing else, coverage may be provided.
The efficient proximate cause doctrine
that applies in many states provides for cov-
erage if the cause that set the problem in
motion is covered. See, e.g., Garvey v. State
Farm Fire & Casualty Co., 48 Cal. 3d 395,
257 Cal. Rptr. 292, 770 P2d 704 (1989). In
Howell v. State Farm Fire & Casualty Co., 218
Cal. App. 3d 1446, 267 Cal. Rptr. 708
(1990), the court held that an earth move-
continued on page 4

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