A New Orleans company sold a four-story hotel on Tulane Avenue without disclosing that the building had a "toxic mold problem," a lawsuit claims.
 
After the sale of the Quality Inn Midtown Hotel, guests began complaining that some of the rooms smelled musty, so the new owner spent a "considerable sum of money for repairs by January 2005," according to a petition filed in U.S. District Court in New Orleans.
 
"However, at least 60 percent of the rooms in the hotel still have substantial toxic mold and need remediation repair," claims the suit filed recently in the state's Eastern District Court.
 
In April 2004, La Strada Inn Inc. sold the property to DIV, L.L.C., a limited liability company in Hattiesburg, Miss., for $3.1 million. It was renamed the New Orleans Midtown Hotel.
 
Neither Divya Patel, manager of the hotel at 3900 Tulane Ave. near Carrollton Avenue, nor F. Pat Quinn Jr., the registered agent of La Strada Inn Inc., could be reached for comment.
 
DIV would not have purchased the property had it known of the toxic mold problem, said Lynn Eric Williams Jr., an attorney representing the Mississippi company.
 
The "defendant also fraudulently covered up the mold problem with wallpaper, paint and/or cleaning so that the mold problem would not be visible or noticeable upon inspection," the lawsuit says.
 
As a result, the plaintiff's franchise agreement with Choice Hotels International Inc. was terminated, and the hotel cannot be marketed as a Quality Inn hotel, according to the lawsuit, which adds that the "plaintiff will have to pay as liquidated damages thousands of dollars in accordance with the franchise agreement."
 
The Mississippi company is seeking damages for loss of income, repair costs, liquidated damages paid to Choice Hotels International and for mental anguish and emotional distress.
 

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