The Claims-Free Architect

How A Mould Expert Worsened Damage From A Faulty Sprinkler Valve

• Season 3 • Episode 11

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When experts with questionable incentives make a simple problem worse by recommending drastic solutions, who is responsible for picking up the tab?

You’ll learn how a faulty valve caused major water damage to a new building. And when a toxic mould infestation ensued, “experts” were called in to assess the damage. This led to a costly legal battle.


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 According to Wikipedia, "Toxic mould". . . or more accurately, toxigenic mould . . . refers to moulds that produce mycotoxins known to harm humans. . . . Exposure to high levels of mycotoxins can lead to neurological problems and, in some cases, . . . death.

But even the merest hint or indication of toxic mould can stir up grave concerns. And, as this story shows, it can also generate unfounded allegations, unnecessary remedies, and extravagant insurance claims. This story is called: “A SPOT OF MOULD.”


Catania is a small regional municipality in the heart of what was once western Ontario’s tobacco belt. When the tobacco industry began its decline in the latter 20th century, alternative crops were introduced, and a newer, healthier regional identity emerged. In response to this new image, the citizens of Catania resolved to “turn over a new leaf,” so to speak, and to replace their 1930s-era town hall with a more contemporary civic building.


Imagine their profound disappointment when they learned that this new building was a respiratory health hazard—as serious as their tobacco crops had been, and quite possibly worse.


The source of this new menace was . . . “Toxic Black Mould.”


The new municipal building had been completed on time and on budget—and nearly everyone agreed that the structure was a fitting symbol for modern Catania. At the ribbon-cutting ceremony, the Architect Aaron Trench described how the architecture of the new structure reflected the forward-looking focus of the municipality. Mayor Adriana Myers followed up by expressing her hopes that the new offices would provide a stimulating environment for councillors and civic personnel to embrace Catania’s modern outlook.


Three months later, just as the municipal employees were settling into their new space, a devastating flood swept through the building, forcing an immediate and total evacuation.

 

Experts called in to investigate the problem identified the source of the flood as a faulty sprinkler valve that had burst over the Canada Day weekend and sprayed water over a wide radius on the second floor. As the pool expanded, it was slowly soaked up by the partitions and furniture on the second floor, while the majority of it found its way through to the lower floor, drenching ceilings, walls, furnishings, computer equipment . . . and just about everything else.


Staff had been relocated to a vacant retail space in a nearby mall. Council meetings were convened in the high school gym. Meanwhile, the waterlogged building sat empty, while appropriate remedies were debated.


A second set of Experts, Forensic Engineers, were called in to assess the damage and to recommend remedial action. The Municipality had assumed that once the exhaust fans and shop vacs had dried things out a bit, it would just be a matter of patching things up and replacing anything that had been damaged beyond repair.


The words “toxic black mould” had yet to enter the discussion.

 

It was one of the Forensic Engineers—a specialist who had been deeply involved in the toxic mould hysteria of the mid-90s and early 2000s—who first raised the issue. This “expert”—although “apostle” might be a more accurate description—had observed small patches of black discoloration on two of the office partitions. He identified these dark spots as black mould, and recommended that the municipality act quickly to remove anything that had been touched by water—and hence may be harbouring inconspicuous mould spores. This constituted the replacement of almost everything, as well as the virtual reconstruction of the interior of the two bottom floors. The municipality set about immediately, acting on the report.


The cost of these measures was significant. Once lost productivity and relocation expenses were added in, the total amounted to 1.5 million dollars. The Municipality, really, had no choice but to recover these costs by claiming against everyone who might be responsible for manufacturing, supplying, specifying or installing the faulty sprinkler valve, which had caused the significant flooding. This unfortunately included the Architect.


By the time the Architect Trench heard about the flood, the repair work was nearly completed. No one at the Municipality had ever contacted him about it, and from what he was able to learn from unofficial sources, the whole thing was a plumbing issue, which didn’t involve him, anyway. So, when he received the Notice of Claim, he was disheartened and confused. This was surely a Mechanical problem. Architecture had nothing to do with it.


When the General Contractor Andy Walper received his Notice of Claim, he recognized that liability existed, and agreed with Trench that the Mechanical Engineer, who specified the system and chose the valve—or possibly the Mechanical Contractor who installed it—should shoulder the blame.


For his part, the Mechanical Engineer Ivan Kran was willing to accept that the sprinkler valve had malfunctioned, but how was that his problem? Mechanical Engineers don’t check every single valve. This was a Mechanical Contractor’s issue.


But, the Mechanical Contractor Mohammed Simam had a surprisingly strong position. He had advised against the use of this particular valve all along, but he had been overruled by the Mechanical Engineer. Still, the valve should not have failed, so if anyone was at fault, it was most likely the manufacturer.


And so it went. . . . Statements of Claim and Defence were bandied about amongst the plaintiff and co-defendants, discoveries were arranged, and professional experts on both sides prepared for battle.


The Municipality’s lawyer Joanna Scopes was a refreshingly practical professional, who didn’t relish expensive litigation any more than we did. She suggested mediation. And, since all the defendants were eager to avoid a long and costly court battle, we readily agreed. A well-known and distinguished professor of law, Enrico Rugetto, was chosen to act as mediator.


The mediation session was scheduled to take place over two days in early March. This turned out to be a relevant factor, because an ice storm occurred on those same two days, bringing with it an urgency to get the mediation over with as quickly as possible, so we could all get back to our homes. This was surprisingly beneficial, since the usual meandering, waffling digressions that some lawyers mistake for argument, was largely avoided.


The venue for the mediation was an enormous conference room, in the ancient administration building at The University of Western Ontario’s Faculty of Law. The dark wood panelling provided a warm, sober environment that was wonderfully conducive to quiet argument. Meanwhile, the worsening weather situation, visible through the old leaded windows, reminded us of the necessity to get down to business as quickly as possible. Professor Rugetto invited the Municipality’s counsel Joanna Scopes to open.


Scopes began by briefly outlining the elements of the claim and introducing her consultants. These experts, a construction technologist and an insurance adjuster, informed us that, once the presence of mould had been verified by their mycologist (aka “fungus expert”), there was no choice but to remove . . . and replace . . . everything within the damaged floors. The consultants passed around sheets showing columns of estimates, “schedules of values” and final costs. They believed, as did Scopes, that the facts spoke for themselves. The remedy may have been costly, but it was the only option. There had been no point in exploring more modest approaches, because the health hazards were simply too great.


As for liability, that should also be obvious. The system had failed. The Architects and Engineers should have inspected the quality of work and spotted the defective valve. At the very least, they should have verified that everything was thoroughly tested before the water was turned on.


At the end of this verbal onslaught, the Professor granted a brief coffee break. We used this pause productively to calm the Architect Trench, who had been squirming in his seat, throughout the “expert” testimony, and couldn’t wait to launch into a rebuttal. With gentle persuasion, the Claims Specialist and Pro-Demnity counsel managed to convince him that we had things under control.


After the coffee break, Pro-Demnity counsel took the floor. He began by asking the plaintiff’s experts a few pertinent questions. When had they been called in? How long had it taken to assess the damage? And what led them to propose such extreme remedies?


The experts replied that they had been called in two or three weeks after the incident. They had noted that the humidity within the office floors was so high that carpets were still wet, despite earlier efforts to vacuum up the water. Wallpaper was peeling off the partitions, and electrical fixtures had short-circuited. It had taken them about a week to survey the damage and produce a report.


This report had suggested that mould might be a problem, since a few black patches had been spotted on the drywall. The experts, being up-to-date on the toxic mould issue and alert to the many dangers it posed, recommended that a mould expert be consulted.


This brought the eminent mycologist Dr. Edgar Stipe into the picture. Dr. Stipe had been contacted, and arrangements had been made for him to travel from Chicago to visit the site. It took another two weeks to fit this into his schedule. Once onsite, Dr. Stipe had supervised the air quality sampling and had examined the ominous black patches, verifying their toxic nature.


The Doctor was a proponent of radical surgery. Half-measures would not be effective in rooting out the dangerous fungus. All flooring, ceiling tiles, partitions and furniture would have to be ripped out and replaced. His advice was followed to the letter. 


Our counsel’s next question seemed obvious: Why hadn’t Dr. Stipe been invited to present his opinion at this mediation?


The Doctor, we were told, was far too busy to attend, but was reachable by telephone on-and-off during the day. It might be possible to get him on a conference call.


A call to Chicago was made, and a 2:00 p.m. teleconference was arranged.


The balance of the morning was given over to the representatives of the Mechanical Engineer, whose lawyer and adjuster regaled us with a preposterous attempt to redirect the blame towards the Architect and the Municipality. These two entities, according to the lawyer, had made the decision to use cheap valves and a cut-rate heating-and-cooling system to save money. The engineer played virtually no part in the decision or the subsequent disaster.


At noon, we broke for lunch. This gave us the opportunity to spend a little more time preparing for Dr. Stipe’s two-o’clock virtual appearance. We were already of the opinion that a degree of fungal hysteria had contributed to the Municipality’s extreme remedial measures. But we wanted to see how much of this response was based on actual scientific knowledge. As it happened, our Claims Specialist was well versed on the subject. 


After lunch, the General Contractor and the Mechanical Contractor both presented their predictable defences: simple workmen, obeying orders. Simam the Mechanical Contractor did venture the opinion that the valve in question may have been defective “right out of the box.” A disclaimer letter alleging improper installation, which had been submitted by the manufacturer, was viewed as self-serving and could easily be disproven.


At 2:00 pm sharp, the virtual conference with Dr. Stipe began. After the usual pleasantries and obligatory banter between Scopes and Dr. Stipe, the Pro-Demnity Claims Specialist was introduced. Once again, the Specialist began by asking basic questions. First, why had Dr. Stipe recommended that two floors of the office building be completely gutted and everything be carted off to the county dump? Had a more modest plan not been considered?


“Not for a moment,” came the immediate response, at which point, Dr. Stipe launched into a lecture on the pulmonary catastrophe and the various other medical horrors that would certainly have resulted from failure to act. He recounted the widely circulated stories about the five children who had died in Cleveland, along with more recent purported deaths. He followed this up by outlining the standard, mandatory remediation protocols.


The Claims Manager pointed out that the attribution of the Cleveland deaths to toxic black mould was still unproven, after nearly three decades. And that, although the potential dangers of toxic mould have been recognized, even the most recent scientific studies note that the clinical significance of this fungus is controversial. For most people, exposure to black mould may only cause a runny nose. Whether it can lead to more serious issues, such as pulmonary hemorrhage, expert opinion is divided. Was the Doctor not aware of these considerations?


Dr. Stipe paused before answering. He was a mycologist, not a medical doctor, he said, and he had no reason to question the available literature, even though it lacked a degree of scientific rigour.


As for the “mandatory” remediation protocols that the Doctor referred to, laws relating to toxic mould did exist, but not in Ontario. In this province, the Occupational Health and Safety Act requires only that constructors and employers take every precaution reasonable in the circumstances for the protection of workers. In other words, there are guidelines, but there is no applicable legislation.


Dr. Stipe conceded the point, but still believed his recommendations were necessary. If not legally required, they at least had an ethical foundation.


The Claims Specialist then asked him to describe the tests that had been used to establish the high spore count on the office floors. He responded by describing the results of these tests, which indicated extremely high readings for several moulds, such as penicillium and aspergillus, which were both known to be toxic.


He was then asked about the ambient spore count on the higher floor, which had suffered no damage. Dr. Stipe admitted that he had not performed this test. When asked the same question regarding the exterior air quality on the day of the test, the answer was the same: No exterior tests had been taken. Well, were tests made on several days, considering that those fungi have a life cycle, and moulds have a tendency to release spores on specific days of their growth cycle? Again the answer was no. Then how can we be sure that on the day when the interior tests were taken, there wasn’t a general spike in spore count? Dr. Stipe countered confidently, but a little defensively, that the levels were so high that he did not need to do the usual number of tests.


By this time, the plaintiff, their counsel and their experts were looking a little grim. They had apparently fallen into the trap of believing that everything their “experts” had told them, right from the beginning, was based on scientific fact. Besides, the patch of black mould was plain to see, and everyone knew how dangerous that could be. If it went unchecked, there would be a public outcry and personal injury claims in the millions. Better safe than sorry.


But their professional “expert” was eroding their confidence.


The Claims Manager had one more question for Dr. Stipe: “I understand, sir, that about six weeks had elapsed between the flood and your tests, during which time the floors were sealed off with polyethylene sheets and remained unventilated. This being late summer, it must have gotten pretty humid in there. Would this not have created ideal growing conditions, by which I mean laboratory conditions for growing mould?” 


Dr. Stipe replied quietly, “Yes, that would be true.”


“Thank you, Dr. Stipe, you have been most helpful.” Looking around the room, the Claims Specialist added: “Would anyone else like to question the Doctor?” No one responded.


Professor Rugetto read this silence as an appropriate time to get down to brass tacks. He separated the parties and dispatched the plaintiff’s contingent to one corner of the cavernous room and the defendants to the opposite corner—like prizefighters in a ridiculously large and ornate boxing ring. He visited the plaintiff first. Twenty minutes later, he made his way to our corner and sat down with us. We couldn’t wait to hear how the Municipality and their counsel had responded to the performance of their vaunted expert.


The Professor, who had obviously appreciated the exchange between Dr Stipe and the Claims Specialist, told us that the plaintiffs had indeed been unsettled by the expert’s testimony. They had watched their rock-solid case turn to Jell-O, and were now prepared to accept 50% of their original claim—750,000 dollars.


This was a large concession; however, we couldn’t see how the Architect had any liability. This was clearly a mechanical matter, aggravated by the owner’s negligence in not drying the place out for weeks . . . and then employing extravagant solutions to a problem that they were largely responsible for having created . . . throwing out perfectly good furniture, computer equipment, etc. We were prepared to offer nothing at all.


Professor Rugetto slowly nodded in agreement. But he ventured the opinion that the Architect had some vicarious liability, simply by having contracted the Engineers, and failing to do anything to protect his client’s interests, once the flood had occurred. We granted that there was a slight possibility of Architectural negligence, and offered what we considered an acceptable settlement cap. We then headed out to the parking lot. It was getting dark, and it was going to be a long slippery drive home. It would be up to the lawyers now to take the matter to its conclusion.


The following day, we reviewed the proposal that had been prepared. The Municipality had reduced its demand to 500,000 dollars. The Engineer’s insurer agreed to put in $200,000. The Mechanical Contractor and the General Contractor added another $200,000, split between them. We agreed to a maximum nuisance contribution of $25,000. But, since this was still 75,000 dollars short, the matter didn’t settle.


In the following weeks, telephone negotiations among the lawyers continued and a deal was finally reached, with all defendants contributing to a pool of another 45,000 dollars, of which, our pro-rata contribution amounted to an extra $2500. 


Good fortune was our companion on the day of the mediation. Not only did the weather encourage an efficient use of our time, but, the Claims Specialist had very recently completed detailed research in preparation for another claim. He had read all the literature and papers by the authorities that Dr. Stipe had cited, as well as the rebuttals by other experts. Had the mediation taken place a month earlier, he would not have been able to confront Dr. Stipe as effectively as he did.


The questioning of Dr. Stipe must have come as a shock to the plaintiff and the plaintiff’s experts. For us, it was good preparation and sheer serendipity.


One of the co-defendants’ lawyers made a perceptive remark, as the mediation was coming to a close. Dr. Stipe, he said, was typical of so many “experts,” who are, in reality, crusaders for one remediation industry or another.


The participants in this claim—plaintiff and defendants—gained some valuable insights into the nature of toxic mould and . . . expert advice. For the architects, there were other important professional lessons to be learned.


Lesson No. 1: When disaster strikes on one of your projects, stay aware of the developing situation. The architect in this case found out too late that “experts” had found a hidden problem and had undertaken a gigantic, costly remediation.


Lesson No. 2: Once you do get wind of an impending action, inform your professional liability insurer  right away. In this instance, Pro-Demnity might have engaged its own experts, to protect the Architect’s interests and avoid the needless costs of extravagant remedies. In this claim, the loss had been grossly inflated. Early and effective remediation would have minimized any mould growth and avoided the “necessity” to gut the building—which we doubt was a necessity at all. 


Pro-Demnity’s own Mechanical Consultant expert confided to us that he agreed that the sprinkler valve in question was unsuitable. It seemed as though the plaintiff actually had a strong case. Who knows what would have happened if the matter had gone to trial.


Lesson No. 3: As much as you can, stay abreast of current thinking, especially with regard to health and welfare. Be rigorous in separating science from advocacy, but avoid unnecessary risk by exercising caution. Knowledge is not just power; it’s protection. You never know what dark adversaries you may have to confront.