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After 8 years, a milestone in battle over mold

It seemed like the perfect waterfront condominium with its sweeping views of Smith's Cove in Gloucester -- and all for the unbelievably low price of $75,000.

But six weeks after moving into the garden-level condo in 1995, Katrine Stevens, a 57-year-old graphic designer, fled the one-bedroom unit after experiencing what she called "flu-like and asthmatic symptoms" from toxic mold.

"It was a dream home in an unbeatable location, " said Stevens. "But within days, I was itchy, my face tuned red, it felt like needles were stuck into my skin, and I had difficulty breathing."

So began an eight-year, precedent-setting battle against the Pirates Lane Condominium Trust that ended last week when an Essex County Superior Court jury in Salem awarded Stevens $285,000. With interest, the amount totals $549,326.

Legal specialists say the Gloucester case is the first jury award for a toxic mold case in Massachusetts and one of an increasing number of such lawsuits nationwide. While the exact number of such cases cannot be determined, the Insurance Information Institute, a New York-based industry group, estimates that legal claims involving mold have tripled nationwide in the last three years, with $3 billion paid out in homeowners policies last year for mold-related cases, up from $1.4 billion in 2001. In 1999, such claims were virtually nonexistent, the trade group said.

"Mold claims have spiraled out of control," said Robert Hartwig, the group's chief economist. "They are being driven by fear of lawsuits, not by the fact that homes are less water tight."

Whenever some insurers learn of a mold claim, they often move a family into a hotel and get independent testing at the insurer's expense, Hartwig said. Mold may not have been the cause of the problem, he said, but by that time the insurance company has already incurred those costs.

Toxic mold exposure has been linked to a number of ailments, including allergic reactions and respiratory disorders. But opponents of toxic mold litigation say the claims stem from greedy lawyers looking for the next cash cow as asbestos lawsuits diminish.

David Yas, editor of the Massachusetts Lawyers Weekly, confirmed that the Gloucester case is the first mold lawsuit victory in the Bay State and noted that the size of the award is significant because the average judgment in such cases nationally is $35,000.

"Mold is a hot topic among attorneys, but the question has been whether these cases could win big money -- and $500,000 is not chump change," said Yas. "It's easy to prove that mold messed up your home but a lot harder to prove it messed up your body. This case sends a message that it's possible to link them."

Jurors in the Gloucester case determined that the trustees were negligent and created a nuisance by allowing water penetration into the basement, causing mold to grow. Another unit on the lower level was not effected.

During Stevens's eight-day trial, Boston attorney Robert J. Doyle of Steinberg, Doyle argued that the trustees knew the condo had a chronic wetness problem and failed to correct the water seepage into the common area and the condo.

During testimony, Stevens testified that following a trip to the emergency room at Addison Gilbert Hospital in June 1995, doctors advised her to move out of the condo.

Paul Gillespie, the Lynnfield attorney who represented the condo trustees, did not return a call seeking comment.

Today, Stevens lives in a studio apartment west of Boston where reminders of the ordeal are everywhere. One wall is covered with magazine clippings and literature about the dangers of mold. Her kitchen table and the apartment floor are crammed with court documents.

"This has been devastating," said Stevens between coughs. "Before I moved into that condo I was healthy. Now, I'm permanently disabled because of mold exposure. I can't be around any kind of irritant and I have to use a gas mask when I go the [apartment building's] laundry room."

In a pair of studies released in July, the US Chamber of Commerce concluded there's no evidence linking mold to health problems. One study said infections caused by mold are rare, except for people who are "immune-compromised." A second study found "there is no sound scientific evidence that mold causes `toxicity' in doses found in homes."

"Lawsuits over fungi fail to meet the test for sound science," said Lisa Rickard, president of the US Chamber Institute for Legal Reform, a Washington D.C.-based affiliate of the US Chamber of Commerce. "Unfortunately, plaintiffs' trial lawyers, with help from the media, are playing on the public's fear of `toxic' mold to generate litigation that costs all of us."

Attorneys say mold-related cases took off after a Texas jury awarded Melinda Ballard $32 million in damages in 2001. Jurors found that a subsidiary of Farmers Insurance Group failed to cover repairs for a water leak, allowing stachybotrys -- a toxic mold - to infest Ballard's 22-room mansion and damage their family's health. An appeals court recently reduced the verdict to $4 million.

But Ballard dismissed assertions that there is no link between mold and chronic health problems. She said the health issues related to toxic mold are authentic.

"I had bloody noses and coughed up blood when I was in the house. And those symptoms disappeared when we moved," she said. "My son suffered from asthma until four months ago and my husband still has neurological issues. Does it affect everyone differently? Probably. It depends on the degree of infestation. Our house had 10,000 square feet of mold growing in the walls and I can tell you it was real."

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