Another groundbreaking victory as jury sides with California family denied insurance claim, but appeals will most likely reduce any end result.
Oakland, CA – A California jury, after carefully weighing both sides of a hotly debated trial in which a family was unjustifiably denied insurance coverage after a pipe leak burst in their home, causing harmful mold to proliferate, overwhelmingly agreed that two insurance company employees had acted with malice, oppression or fraud in the claim handling. That finding opened the door to possible punitive damages in the case.
Julie Radosevich, 49, won the initial punitive damage award — which is intended to punish a wrongdoer and discourage similar conduct in the future — against Amco Insurance Co. last week at the conclusion of a five-week trial in Oakland. She was also initially awarded $53,000 in compensatory damages to cover damage to her home and emotional distress caused by the ordeal. This case appears to be an isolated case, but appearances are deceptive, as this is but one example of common practice that is more the norm than a rarity. Unfortunately, the media has failed to report that these common cases of insurance claim denial and failure are becoming a nationwide scourge. These high-profile victories are often a flash in the pan; as things are not always as they appear, especially in the notorious world of mold trials.
Many well-paid naysayers would like to paint the picture of a plaintiff mold victim as a greedy, vindictive, and often litigious opportunist trying to feast off the meager profits of honest, old-fashioned organization of do-gooders trying to offer a generous service to the public. These insurance customers are often portrayed as whiners who suffer from fictional ailments and are looked upon as ‘pond scum’ for the over-abundance of ambulance chasing lawyers desperate to take on big mold cases.
This gross misconception is a mere figment of one’s imagination and if this scenario is the first thought to spring to your mind, than some well-contrived marketing efforts have paid off. As previously stated, things are not always as they appear, and it is time for the truth to be told.
The Lawsuit Myth
Thousands of American homeowners are being denied coverage when they file insurance claims but, unfortunately few insurance companies are actually held accountable for any alleged misdeeds. Numerous studies have uncovered the dangerous health consequences of household mold and it is so costly to mitigate that some insurance companies have opted to deny or limit coverage in the hopes that their intimidated customers will throw in the towel on this uphill battle rather than spend their life savings trying seek civil justice.
For the few mold victims who are willing to litigate the injustice of losing their homes, health and livelihoods, and have the financial means to do so, soon realize that fighting a legal dispute with an insurance company is like drawing blood from a turnip. The reason mold case victories are so rarely reported is the fact that these cases, as any other environmental issue, is exceedingly expensive to try. Unlike the movies, very few attorneys are willing to take mold cases, while even fewer take these cases on a contingency basis. The average trial lawyer who is even willing to take on a mold cases admits that even with a hefty retainer and partial contingency, work for minimum wage since mold cases are so time and labor intensive as they take on big corporations. For every filed mold complaint, it is safe to ascertain that at least 4,700 more mold ordeals have occurred without any legal recourse. The reasons are more than obvious.
The average mold victims of America are either too sick, too broke, stressed, overly- intimidated, and too tired to take on the seeking of justice as a long list of defense attorneys, invasive and expensive medical testing (most medical tests and physicians are not covered by medical insurance), nosy and inflammatory depositions, collecting small but possibly important evidence that an attorney doesn’t have time to do, obtaining replacement and remediation quotes, documenting and photographing a total household inventory, paying for two residences, replacing contaminated household items, trying to regain lost memory and health then repair altered immune systems, enduring horrendous physical symptoms while trying to educate and obtain answers from inexperienced, insincere, unskilled and skeptical doctors, explain lost work time to superiors, find a new job or borrow money from family or friends to compensate for lost wages and/or a multiplicity of expenses, and taking care of other sick family members and pets. If you think this ordeal sounds unrealistic, ask a mold victim who has lived to tell a similar tale of fate.
The defense attorneys are so experienced at dealing with sick and homeless mold victims, they make quick assumptions of any possible weaknesses, and many of these well-represented lawyers thoroughly enjoy discrediting these bewildered and sick plaintiffs, while milking their corporate clients for every waking minute spent on a case. Regardless if they hire a court reported, paralegal, or investigator, they tenaciously bill their clients out at their average $400 hourly rate.
If the mold victim is even remotely lucky, 99% of the time these cases settle out of court due to the fact that these desperate people, who after losing virtually everything, opt out to get on with their lives as they often feel three to five years into this that it is time to get on with their lives and decide to cut their losses in hopes of replacing their former dream homes with a modest substitute if they can afford a minimum down payment.
Another part of the story that fails to be told is the fact that once a mold claim is made to their insurance companies, their names are immediately and automatically absorbed into a very unfair database, called a C.L.U.E (Comprehensive Loss Underwriting Exchange) Report. The CLUE report with one’s insurance rating score is an industry standard and a mold claim generally remains on that report for at least five years. This has kept many innocent people who have only made a minor mold claim ineligible or almost impossible to obtain homeowner?s insurance for years.
This makes many activist groups wondering why they should even have to pay for insurance coverage since it appears to be contradictory for consumers. Are these ‘dog and pony shows’ just a ploy to pretend a good faith effort to appease loss-fearing mortgage lenders? What good is insurance if few are able to utilize it?
The 1.5 Million Dollar Verdict; the End?
Doug Prutton, Radosevich’s attorney, said the case began as a leak in a pipe connected to the water heater in Radosevich’s home on Mount McKinley Court in Pleasanton. The burst hot water pipe was discovered in January 2002. It was unclear how long the pipe had been leaking, the attorney said.
When a plumber opened up a wall in her utility room to locate the source of the leak, mold was discovered in the wall cavity and crawl space, Prutton said. Further testing revealed mold spores were in the air throughout the home.
The insurance company, according to Prutton, initially took the position that the claim may not have been covered because the policy had an exclusion that applied to pipe leaks that lasted for “weeks, months, or years” or because of another exclusion relating to standing water under a home. This is a common excuse for insurance companies to not follow-through with coverage. An attorney for Amco Insurance failed to comment Wednesday, May 4, regarding their stance on this case.
More than eight months after the pipe leak was inadvertently discovered, the insurance company paid to clean up the mold in Radosevich’s home, Prutton said, but the amount was less than what the contractors had actually charged for the work.
The media and special interest groups have unfairly portrayed mold victims as greedy opportunists; the truth couldn’t be further than this fallacy. According to a recent nationwide survey, most just want to be treated as a respected customer and have the facts heard with respect. Prutton said Wednesday, May 9, that his client felt “vindicated” by the verdicts, a rare incidence for many insurance customers who have filed claims for coverage issues. “Her whole goal was to show that this insurance company treated her poorly,” the attorney said.
Prutton said he expects Amco attorneys to file a motion with the court seeking a reduction in the punitive damages on the grounds that they are excessive. Additionally, as in the majority of mold cases, this one will certainly be appealed until little, if any awards will be ordered. The common train of thought among insurance companies is to appeal until the plaintiff has no funds to go on.
An independent report by Sheely S. Page