Orange County Jury Delivers Defense Verdict in Mold Case
www.marketwatch.comLast update: 5:38 p.m. EST Nov. 3, 2008
SANTA ANA, Calif., Nov 03, 2008 /PRNewswire-USNewswire via COMTEX/ -- Homeowners Now Must Pay Defense Attorney Fees and Costs
Orange County homeowners now face a significant attorney fee and cost bill after losing a closely watched mold trial. Yesterday afternoon, an Orange County jury delivered an unanimous defense verdict in favor of a franchisee for a national dry-out/mold remediation company. This two month trial is significant in that it follows a national trend in terms of mold litigation involving after the fact claims against the vendors and the insurance carriers that recommend them.
"An emerging trend we are seeing play out in the courts involving mold arises after the remediation is complete," said trial lawyer Victoria Ersoff, a partner with Wood, Smith, Henning & Berman. Ersoff, who has now tried a succession of mold bodily injury and property damage cases to defense verdict in a row, explained the frequency of claims involving people saying they are sick from exposure to mold is declining because they are expensive to prosecute and difficult to prove. "What we are seeing is more cases where homeowners are suing the remediation companies under pure negligence theories and those companies who recommend these vendors for various theories emanating from mold claims." Here, the recommending company was a first party insurer, which gave rise to allegations of bad faith and vicarious liability for the remediator which was on a list of preferred vendors.
After rejecting a statutory offer to compromise prior to trial, the two month trial went forward involving the examination of twenty-four witnesses including nine expert witnesses. An attorney fee provision in the underlying contract between the remediation company and plaintiffs' and a rejected statutory offer to compromise now set the stage for a motion for attorney fees and award of costs.
In this particular case, H. Webb and Donna Blessley, filed suit against a dry-out/mold remediation company alleging negligence and also complained against the first party insurance carrier for breach of the implied covenant of good faith and fair dealing and breach of contract. The Honorable Kirk Nakamura presided over the two month jury trial.
H. Webb Blessley a former Vice President of McDonalds Corporation, Real Estate, Construction & Architecture - Worldwide, alleged the remediation company improperly performed a dry-out of his multi-million dollar residence in the exclusive private gated community, Lantern Bay Estates in Dana Point California, following a purported flood from a purported toilet leak in a second floor bathroom. The exclusive residence was one of several homes owned by the Blessleys. As a result of the alleged improper dry-out, H. Webb and Donna Blessley claimed "toxic" mold and water damage caused significant property damage to their ocean view property. In addition, the Blessleys claimed their first party insurance carrier committed bad faith by failing to properly handle their claim, despite the fact that they were paid in excess of $150,000 for damages allegedly caused by the flood.
This case is unique in that the plaintiffs' alleged the mold remediation company was an agent of their first party insurance carrier despite the fact that plaintiffs contracted directly with the remediation company. This gave rise to a vicarious liability theory for the alleged negligence of the remediation company. "Nationally, claims against remediation companies which have proceeded to trial and verdict have not been successful for the plaintiff bar given the defined scope of works developed by others and exculpatory language in the underlying agreements," explained Sy Everett, an attorney with the Orange County office of Wood Smith Henning & Berman. Everett, who second chaired the trial, said "Here, the theory would have tried to boot strap the company recommending the remediation company into liability for any alleged negligence of the remediation company, which would be problematic for those companies - builders, property managers and the like - who truly are on the front lines of handling mold claims on a daily basis."
After a two month trial, the jury overwhelmingly rejected the claims of plaintiff against the remediation company by a count of 12 - 0. The Orange County jury also resoundingly found in favor of the first party insurance carrier by a vote of 10 - 2 on the basis that H. Webb Blessley or Donna Blessley knowingly and willfully misrepresented or concealed a material fact concerning their insurance claim. Significant testimony focused on Mr. Blessley's claim of alleged toxic mold in his house based in part on the opinions provided by his expert/general contractor David Christakes, who claims he has a heightened sensory perception that enables him to "smell mold" in a house regardless of whether or not it is visible. In addition, Plaintiffs relied heavily on expert Joe Spurgeon, Ph.D. who in deposition denied he observed mold at the property, and surprised all when he testified at trial that he observed "mold-like substances" throughout the residence. Joe Spurgeon also provided testimony regarding a "database" he kept in his head that influenced his opinions regarding the mold levels in the house.
Plaintiffs were represented by James Keathley and Katherine Keathley of Keathley & Keathley in Newport Beach. The first part insurance carrier was represented by Hollins * Schechter in Santa Ana. The mold remediation company was represented by Victoria L. Ersoff and Seymour B. Everett of Wood, Smith, Henning & Berman, with offices spanning the Western States.
Wood Smith Henning & Berman is in the process of filing a cost bill and seek expert fees and costs pursuant to California Code of Civil Procedure section 998.
For more information on Wood Smith Henning & Berman go to
www.wshblaw.com SOURCE Wood Smith Henning & Berman LLP
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