Mold/Remediation: Michigan Appellate Court Addresses Duty Owed Homeowner by Insurance Company and Cleanup Contractor

Walter G. Wright and Claire Maddox | Mitchell Williams | September 12, 2018

The Court of Appeals of Michigan (“Court”) in an August 21st opinion addressed an issue regarding the duty and liability of Farmers Insurance Exchange (“Farmers”) and U.S. Disaster Services LLC (“U.S. Disaster”) owed to an insured homeowner in addressing flood damage. See Abraham v. Farmers Insurance Exchange, No. 335353, 2018 WL 3998728 (Mich. Ct. App. August 21, 2018).

The damage caused by interior flooding included significant mold growth.

The daughter of the homeowner (“Plaintiff”), reported flood damage in her mother’s home to the insurance company (Farmers). Farmers recommended using U.S. Disaster to mitigate the damage caused by the flooding. U.S. Disaster began working on the home after the Plaintiff signed a “Work and Direct Payment Authorization” document.

U.S. Disaster conducted remediation services. In the course of doing so it discovered mold in the subfloor. In response to this discovery the Court notes:

. . . the contract between the homeowner and U.S. Disaster provided that U.S. Disaster “will undertake best efforts to clean and remove only mold and mildew it discovers.” However, when the mold was discovered, U.S. Disaster employees did not attempt to “clean and remove any mold” other than to spray the subfloor with an antimicrobial chemical, an action which U.S. Disaster concedes, is at best, a means to prevent mold from spreading, not to eliminate or contain it. After spraying, U.S. Disaster ceased work and left the premises never to return.

The Plaintiff testified that she overheard a phone call between Farmers and U.S. Disaster in which Farmers told the employee of U.S. Disaster to leave the subfloor in place and not complete remediation.

U.S. Disaster conceded that after discovering the mold, it stopped working and recommended that the Plaintiff hire an environmental consultant.

The trial court granted summary disposition to Farmers and U.S. Disaster. In reviewing the trial court’s decision, the Court stated it must address three questions:

  1. Whether Defendant owed a duty to the Plaintiff
  2. Whether there is a question of fact that this duty was violated
  3. Whether any claim was extinguished by release

The Plaintiff argued Farmers:

  1. owed her a duty to hire a qualified mitigation company to mitigate the water damage,
  2. warn her of the risks associated with mold and advise her to leave the home, and
  3. not to direct or control the scope of U.S. Disaster’s work.

The Court rejected all three arguments. It held the Plaintiff failed to establish any evidence which held the insurance company to such duty, failed to establish U.S. Disaster was not qualified, and failed to state a specific claim in relation to her testimony about overhearing the two Defendants.

The Plaintiff also argued that U.S. Disaster owed her a common law duty to take reasonable precautions to assure that their work did not harm her or make an existing hazard more dangerous. A common law duty analysis balances factors such as relationship of the parties and the foreseeability of harm.

The Court agreed that U.S. Disaster owed the Plaintiff a duty for two reasons:

  1. The duty was to undertake the best efforts to clean and remove any mold
  2. The harm was foreseeable, and U.S. Disaster admitted understanding the risk mold poses

Therefore, given the relationship and foreseeability of harm, U.S. Disaster was held to owe Plaintiff a duty to perform its work so as not to create any new harm or worsen already existing risk of harm.

U.S. Disaster also argued that the case should be dismissed because the Plaintiff signed a release. The Court rejected that argument for three reasons:

  1. There is a question of fact as to when the release was signed and what was known at the time;
  2. There is, at minimum, a question of fact as to whether Plaintiff signed the release as her mother’s attorney-in-fact or in her individual capacity;
  3. There is no evidence in the record that the release was signed in exchange for some consideration

The Court affirmed the grant of summary disposition to Farmers Insurance and reversed the grant of summary disposition to U.S. Disaster.

copy of the opinion can be found here.

3 Mistakes that Mold Remediation Contractors Make

PR Newsroom | November 20, 2014

When dealing with mold remediation there are certain steps that need to be taken in order to prevent the spreading of mold to other areas of the home or not removing it fully. All of this can occur if the mold remediation contractor makes a mistake.

Mold remediation is a task undertaken by people who are looking to improve their health at home. There are many different companies that provided this as an “additional” service that they offer in conjunction with their other services.  In many cases these companies do not have the proper certifications nor training to handle mold remediation in a proper and thorough manner. There are three mistakes that these untrained companies make and the public has a right to know what they are doing wrong. A frequently asked mold removal question is what steps can an uncertified [companies] do to make the situation worse. One of the first missteps that these companies do, is that they do not put up containment.

The containment part of the mold remediation process is absolutely critical in the success of removing the mold from the property. If there is no containment the mold particles that are being removed can release spores that will more than likely spread throughout the property. Also, if there is containment setup it needs to be done properly, otherwise the mold particles can still spread throughout the property. Another critical factor that many of these company make is not solving the problem of the cause of the mold.

Many types of mold are caused by dampness, moisture collecting or a host of other factors. Without these problems being solved the mold will more likely return to the trouble spot area. When a contractor comes out to the site they should ask the property owner, what is causing the problem, is it a broken, pipe, a leaky, or other areas of the property. Without this information the contractor is not effectively solving the problem because if the moisture issue is not solved that area of the property will more likely have mold return to that same area. Another critical piece that is needed for mold remediation is the equipment.

Mold remediation is controlled demolition in the area of concern. This would require the removal of flooring materials, walls, and insulation to remediate the mold. Many times companies just remove the visible surface mold in the area of concern. Generally in order to remove the mold fully from the area the mold needs to be removed completed removed two feet around the area of concern.

All of this factors in when dealing with mold remediation contractors failing to follow the proper precautions. An IICRC mold remediation company is trained in resolving these problems before they start. Remember when looking at contractors you can look at their customer testimonials and see how well receptive they are. Remember these three mistakes when choosing your mold remediation contractor.

via 3 Mistakes that Mold Remediation Contractors Make | SYS-CON MEDIA.