HONOLULU -- The problem of mold at the Hilton Hawaiian Village has resurfaced again -- this time in a class-action lawsuit.
Guests who stayed at its Kalia Tower during the time a mold problem was discovered filed the lawsuit against the hotel.
When mold was found in hotel rooms in the Kalia Tower at the Hilton Hawaiian Village two years ago, the tower was nearly gutted and the mold cleaned up at a cost of $55 million.
Circuit Court Judge Sabrina McKenna Thursday certified a class-action lawsuit filed by guests who stayed at the hotel between June 14 and July 23, 2002, who want their money back on the rooms for which they paid.
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The issue here is one of disclosure. The attorneys filing this lawsuit said the Hilton should have told guests it had found mold in some of the rooms at the Kalia Tower in June and July of 2002.
"Any guest that stayed at the hotel should have been told about that mold problem to either get an opportunity to stay in another tower or to make a decision for themselves whether they did want to stay in the Kalia Tower," attorney Tom Grande said.
Attorneys for the Hilton said they were told the mold was relatively harmless and experts believed the hotel caught the problem early. Lawyers said the varying amounts of mold found in the hotel rooms at the beginning would make it difficult to fight a class-action suit.
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Mata Musing
Note that this lawsuit has nothing to do with anyone suffering from health problems as a result of their stay at the Hilton. It was merely it's presence that led to the litigation.
The Hilton's plight brings to light the hot button issue of mold that plagues the real estate world.
In an alarmist, litigation happy society, the mold issue promises to be one that can catastrophically affect any property owner... from residential to commercial. Home or business property owners can find themselves with a white elephant on their hands, unable to insure or to sell their properties once claims for the clean up of mold, toxic or not, have been filed.
Coming from a state where mold should rightly be our state flower, I'm here to tell you that with over 100,000 types of mold, most of which has been present for millions of years, the chances of it being present in any structure located in anything short of a desert is a high probability.
The question which any prudent buyer should consider is to what degree is this commonplace fungi important? Adults and children with a highly sensitized constitution should indeed have to pay more close attention than others.
But there is a sidebar beyond health that every property owner should be aware of. With property disclosures mandated as the norm for residential purchases and investors doing their due diligence with professional inspections, a potential buyer opting to do a "mold test" that reveals it's presence can set in motion a cycle of events that can lead to, at the least, a costly clean up and significantly higher insurance rates for the owners - both current and future.
If a test by a potential buyer reveals mold, even non-toxic, and the buyer wishes to go ahead with the purchase but requests a clean up prior to closing, any claims for doing so can end up on the C.L.U.E. Report and effectively backfire, costing the new purchaser an astromical insurance rate and hinder their own future sale of the same property.
Worst case scenerios for inspection results - all of which an owner must disclose or face "misrepresentation" litigation, can result in complete denial of insurance, effectively rending the home impossible to sell, or the demolition of the home.
Adding to the increased risk of loss in value is the effects of the lawsuits on businesses. The first notable litigation, the Ballard Texas lawsuit against an insurer, culminated with the $100 million award. Following "suit" quickly was Ed McMahon who settled for $7 million. Erin Brockovich, who helped the scare rise to mammoth proportions with her infamy, sued for millions but settled for $130K on her $6 million dollar mansion.
The lawsuits were not confined to insurance companies...just in case some of you are jumping with glee. Also plagued by lawsuits are contractors, home inspectors, previous home owners... the list is endless to the defendants named.
Overall, the litigation trend was welcomed by trial lawyers, who quickly seized on the new cause, calling mold "Black Gold" .
Starting in 1999, mold filings in Texas increased sharply—up by 1,300% from the beginning of 2000 to the end of 2001, according to the Insurance Information Institute.[125] Average mold claims today cost about $35,000, and many exceed $100,000.[126] Through 2001, mold claims had added over $1 billion in costs to the homeowners-insurance system in Texas alone; that’s an annual increase of about $440 for every insured household in Texas.[127]
Although mold litigation caught fire in warm-weather climates like Texas, California, and Arizona, the litigation frenzy has now gone national. One of the biggest cases of 2002 involved an apartment complex in New York City. At Henry Phipps Plaza South, 400 residents sought class action status for an $8 billion lawsuit—the largest mold lawsuit to date. The group settled for $1.2 million.[128]
As is usual, extreme cases by a few litigants with aggressive lawyers have turned the real estate world upside down for the rest of us. As too many see a way to make an easy buck in the courtroom, the effect will be to bankrupt small and large businesses alike, and increase the possibility that your own home investment may turn into nothing more than the value of a vacant lot.
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