Appellate Court Links Building Mold and Illness

The problem of mold recently got more dangerous for New York owners. Four years ago, a key appellate court decision in Manhattan blocked millions of dollars in legal claims for damages for health effects of mold in buildings, saying that the scientific evidence that mold caused illness was in dispute.

However, that conclusion was recently overturned by a split 3-2 decision by another five-judge panel in the same court. The panel found that the scientific literature was now "indicative of a causal relationship."

The concern for the New York's real estate industry is that this will lead to a new wave of personal-injury lawsuits for mold injuries, driving up insurance rates and costs for building owners.

In the current case, a tenant, who once lived in a ground-floor apartment above a moldy basement in a Hell's Kitchen tenement, filed a complaint seeking $11.8 million in damages, primarily for health problems.

The former owners of the building had argued that it wasn't possible to link her conditions to mold dust that wafted up from the basement during the brief period when a work crew began removing debris from the basement in 2003.

The new appellate decision said the previous decision hadn't ruled out the possibility that "dampness and mold can ever be considered the cause of disease." And it found that several new studies added to the weight of evidence on the theory.

Last year housing inspectors issued 15,942 violations for mold-related conditions, a 19 percent increase from 2007. The number of the most serious category of violations rose by 67 percent during the same period. But personal-injury mold suits went into a lull after the 2008 appellate court decision involving a family living in a co-op apartment in a basement and first-floor co-op apartment on East 52nd Street. That decision, known as the Fraser decision, found that there was no scientific consensus that air-borne mold spores caused illnesses. It barred testimony from experts who blamed mold for health problems.

The majority opinion in the recent case, written by Justice Sallie Manzanet-Daniels, said the suit can proceed, noting several new studies on mold illness. But a dissent by Justice James Catterson said the tenant's lawyers had failed to show that her theory of mold illness "is generally accepted by the scientific community."