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Mold lawsuit blazes trail (But settlement fails to clarify issues)
By Greg Thomas
Real Estate Writer/The Times-Picayune
December 18, 2002
An insurance company's $1.1 million settlement of a mold lawsuit involving a St.
Bernard home is considered the first resolution of such a case in the
metropolitan area, but the settlement means key facts will not be tried in court
and leaves undecided how Louisiana courts handle so-called "toxic mold" cases.
The suit claimed Continental Insurance Co., also doing business as CNA Insurance
and Encompass Insurance, mishandled a mold claim on a $600,000 home.
The plaintiffs were the family of Cynthia Parden, her husband, Rodney LeBlanc,
and their children.
On June 10, 2001, the Pardens reported water damage and mold on their ceiling to
Continental. On July 7, 2001, a Continental adjuster estimated $197 in damage,
and since the Pardens' policy had a $2,500 deductible, did not pay the family
anything.
The Pardens eventually had to leave their home, court records state, because of
mold that formed as a result of the leak. Parden, her husband and their children
suffered numerous health problems, including allergic conditions, respiratory
problems, urinary tract infections, fatigue, anemia and ear infections, court
records allege.
The leak was originally believed to be from the Jan. 23, 2000, hailstorm that
struck parts of New Orleans and St. Bernard. Continental, represented by local
lawyer Doris Bobadilla, argued that the Pardens waited past the one-year
deadline to turn in an insurance claim following the incident that caused the
damage.
Midway through the St. Bernard lawsuit, Continental shifted strategy and filed a
third-party lawsuit in the case against the contractor who built the home,
Anthony Marino, doing business as Prestige Homebuilders. The suit against
Prestige Homebuilders alleges the improper installation of an exterior
insulating finishing system often called synthetic stucco that is believed to
have caused the moisture concentration.
Continental also sued the former owners of the home, Rosalind Manalla Lamarque
and Timothy Lamarque, alleging poor maintenance and failure to disclose the
moisture problem to the Pardens when selling the home.
In Louisiana the cause of the original water damage determines whether mold can
be covered by insurance.
The state commissioner of insurance has said mold damage is excluded from
coverage unless the mold is the result of leaks from a "sudden accidental"
event, such as a broken pipe during a cold snap. The state interprets mold
growth from slow leaks to be a maintenance issue exempt from homeowner's
insurance coverage.
The case doesn't challenge Louisiana's approach to mold exclusions. It also
doesn't decide if there is a clear link between exposure to molds and illness.
By settling, the Pardens agree not to hold the insurance company liable in the
future.
Madro Bandaries, an attorney for the Pardens, said he believes the settlement
puts an end to the state's first mold lawsuit.
Louisiana's acting commissioner of insurance, J. Robert Wooley, said he is aware
of only two high-profile lawsuits over mold: a proposed class-action suit filed
against the owners of the Plaza Tower office building at 1001 Howard Ave. and a
lawsuit stemming from a contractor-developer dispute over the FBI's new
headquarters building at 2901 Leon C. Simon Blvd. Both of the cases are pending.
"I can't think of any other major cases," Wooley said earlier this week. |
