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OREGON MOLD LITIGATION (cont'd)

Rutherford v Suniga, arbitration case

This case arose out of a real estate sale transaction. Plaintiffs bought a home from the Respondent who did not disclose that the house had mold problems. After buying the house, they learned that the house had twice been inspected and found to have mold problem. The seller had allegedly painted over spots of mold and concealed the mold contamination. Plaintiffs sued for among other things fraud by concealment. They alleged a claim for punitive damages and the case then settled for low six figures.

Johnson v Miller, Curry County Case No. 06CV0045

This case came two years after the Haynes verdict. Plaintiffs, husband and wife, alleged personal injuries including neurological damage from exposure to toxic mold in their rental home. They also alleged substantial monetary damages from loss of income and damaged and contaminated personal property. The total claim was for $ 5 million. Defense counsel attacked all of plaintiffs’ experts, including the late Dr. Vincent Marinkovich, at an OEC 104 evidentiary hearing. The effort to exclude plaintiffs’ experts failed, but defense counsel persisted in his effort to discredit plaintiffs’ experts throughout trial. Defense counsel objected to the testimony of plaintiffs’ neurological expert, claiming that he did not receive the neurologist’s report and most recent chart notes until just before trial and was prejudiced in his ability to generate a response. Plaintiffs’ attorney did not ask that the 104 hearing be rescheduled for a time that the neurologist would be available in court to testify and, instead, offered to have the neurologist testify by telephone. The trial court refused to allow certain neurological evidence into evidence, including the most recent chart notes from the neurologist. The jury returned a verdict on March 23, 2007 for the defense.

Practice tip: I hate to see a client harmed because an attorney did or didn’t do something properly or promptly. Make sure that when you receive ongoing medical records from a treating physician or expert that you date stamp them in and send a copy out to defense counsel immediately by fax. This will allow you to say that “defense counsel got them the day we got them.” This should forestall defense claims of unfair surprise. When defense counsel claims he was sandbagged or prevented from mounting a defense, you have proof that he got the records as soon as you did. Also, argue that the proper remedy is not exclusion of an expert that can help the jury understand the facts, but to give the defense attorney extra time if he needs it, to confer with his own expert about the recent records. In my experience, if the court asks the defense lawyer how much time he needs, he will have to admit that he’d need, at most, a day or so. The testimony of other witnesses can be taken during that time. This may cost more to keep the expert around, but it is better than losing his testimony altogether.

F. Cases pending resolution and stil in court

Lillard v Dalton and Lehmann, Yamhill County Case No. CCV 00055

This case arose out of the water leak described in Prudential v Lillard above. Mrs. Lillard sued the Daltons for, inter alia, negligent repairs. The Daltons, who had since moved to Nevada, filed bankruptcy. After the bankruptcy was concluded, Mrs. Lillard was allowed to go forward against the Daltons to the extent of available insurance. She had also sued her building inspector, Mr. Lehmann who failed to detect the lack of flashing and other defects in the house. The inspector tendered the defense to his insurer which refused to defend him and denied coverage. He later confessed judgment in favor of Mrs. Lillard and her daughter for $ 400,000, admitted liability and assigned all of his rights against his insurer to Ms. Lillard and her daughter. Mrs. Lillard agreed to file a declaratory judgment action against the insurer to obtain a ruling that their claims were covered by the liability policy and that the insurer had breached its duty to defend the insured and extend coverage. In addition to assigning his rights against his insurer to Lillard and her daughter, Lehmann paid $ 10,000 towards the cost of the declaratory judgment proceeding. The Dalton case was placed into abatement pending the resolution of the declaratory judgment case. Which is….

Lillard v Red Shield Insurance, Yamhill County Case No. CV050291

Mrs. Lillard and her daughter brought suit as judgment creditors against Red Shield Insurance Company, Mr. Lehmann’s liability insurer. Lehmann made judicial admissions to both liability and damages in his answer, and cross claimed against the insurer for a declaration alleging, inter alia, that it had breached its duty to defend. The trial court entertained motions for summary judgment on the issue of coverage and whether the insurer breached its duty to defend its principal. In a decision on December 4, 2007, the trial court held the insurer breached its duty to defend and that the claims were covered. It denied Red Shield’s cross motion asserting that the claims were not covered. The court deferred the issue of damages and whether the settlement was reasonable. We are now at the stage of the case where we determine the insurer’s obligation to pay. Further motions are currently pending. This case appears destined to be a reported decision.

Harrington v Avion Water Co. and Serv Pro et. al., Deschutes County Case No. 06CV0065MA

Avion Water Company provides water service to Bend, Oregon, where the Harrington’s reside. On November 1, 2004, Avion’s water system malfunctioned, sending 150 pounds per square inch of water through the Harringtons’ plumbing system, which was rated for 90 PSI. This blew out the Harringtons’ plumbing system, flooded the Harrington’s crawlspace and destroyed their furnace. Bob Harrington had just gone through back surgery and was hospitalized. When Mrs. Harrington arrived home after visiting her husband, she discovered that the house had no heat and no water. She then peered into the crawl space where the furnace was located and discovered the flooded crawlspace. She immediately called Avion and asked it to turn off the water to her house. Roto-Rooter filled a 10,000 gallon tank truck to capacity with the water from the crawl space and there was still water remaining. The Harringtons hired a local Serv Pro franchise owned by a person they knew to dry the house and remedy the damage caused by the flood.

On November 16, 2004, about two weeks later, Avion again sent high pressure water through its system, this time blowing out the pressure release valve on the Harrington’s hot water heater. Mr. Harrington was home convalescing from his back surgery and witnessed this first hand. Later, while talking to a neighbor, he was informed that the same thing had happened to the neighbor’s house. Mr. Harrington testified at his deposition that he called Avion, which admitted that it was responsible for both the initial crawl space flood and the second water heater blowout.

Avion sent a check for $ 11,910.55 as payment for the furnace and the Serv Pro franchisee’s emergency services, its check transmittal said the check was “partial payment of property damage.” Later, Avion sent a second check to cover the second November 16, 2004 incident causing damage to the Harrington’s water heater and kitchen floor on the main floor of the house. Avion also sent the Harringtons a document with this second check, that it later portrayed as a universal release of both claims. Mrs. Harrington did not sign the document. Mr. Harrington did sign it, but testified that he believed it was merely a release of a dispute over Avion’s willingness to pay only the depreciated value of his furnace and flooring. Mr. Harrington testified that he did not intend this document to release any issues concerning the crawl space or subsequent health problems associated with mold exposure. Mrs. Harrington testified she did not intend this to be a release of all claims. She did not sign the document.
Avion moved for summary judgment asserting the release as a final release of al claims, even if Mr. Harrington did not intend it to be so. Serv Pro filed a motion for summary judgment asserting that a limitation of liability provision on the back of one of its forms that it portrays as a contract limits the Harrington’s remedies. Mr. Harrington did not sign that form, only Mrs. Harrington did. The court denied both motions for summary judgment. It denied summary judgment on the release issue because of the presence of questions of fact concerning the issues surrounding the release. It denied summary judgment on the limitation of liability issue for similar factual disputes.

The Harringtons incurred economic damage to repair their house, for loss of use of their house and for medical expenses in the amount of $ 125,715.16. They also seek damages for pain and suffering. As of this writing we have a December 2008 trial date.

Other Mold Cases

The following mold cases have been reported to me (without a lot of details) by the attorneys who represented the plaintiffs or in some cases by the plaintiffs themselves.

1. Sanders v Farmers, Benton County, Oregon, Circuit Court Case No 990-10109

a.       Amount claimed: > $1,000,000
b.       Types of claims: contract, negligence
c.       Result: confidential settlement

2. Stone v Safeco, Clark County, Washington, Superior Court Case No 02-2-04464-0

a.       Amount claimed: > $500,000
b.       Types of claims: contract, negligence
c.       Rulings: Defendant prevailed on summary judgment

3. Schumacher v Thompson, Multnomah County, Oregon, Circuit Court No 0308-08064

a.       Amount claimed: $100,000
b.       Types of claims: contract, negligence
c.       Result: confidential settlement

This article is excerpted from Toxic Mold Litigation, Second Edition, published by Lawyers and Judges Publishing Company. It is reproduced here by permission of the publisher.

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