Mold creeping into home defect lawsuits

Jennifer Shubinski

Monday, Jan. 26, 2004 | 10:53 a.m.

Three Nevada judges who have become experts at trying and resolving construction defect cases warned that the next big issue, which they say could cripple the industry, is starting to show up in their courts.

Mold.

"Mold is the next genre of case," said District Judge Nancy Saitta, a panelist at a Nevada Subcontractors Association meeting last week. "We are getting ready for them and are anticipating our first mold case trial in 2005."

In an effort to educate the public about the state's new construction defect law, commonly referred to as SB 241, judges from the Eighth Judicial District Court met with the Nevada Subcontractors Association Thursday afternoon. Rounding out the crowd was a handful of construction defect attorneys and legislators.

Saitta said about 75 percent of the construction defect cases filed in the past six months have some sort of mold claim. She said cases involving mold can be more difficult than construction defect cases because a personal injury claim is often included in the lawsuit.

Saitta said she recently attended a three-day conference about mold to study the issues as well as the science concerning mold.

In what could be described as a wary crowd -- some audience members grumbled under their breath as the judges talked about construction defect litigation -- the judges were just as cautious. Chief Judge James Hardesty, who acted as moderator for the group, told the crowd that because of the judicial code of conduct the judges could not speak about specific cases or interpret the law for audience members.

Since the law went into effect Oct. 1 giving contractors the "right to repair" an alleged defect before a lawsuit is filed, seven construction defect cases have been filed in Clark County, bringing the total number of pending construction defect cases to more than 230.

"This is a very serious problem but from the judicial point of view it's a monumental problem; the case load is staggering," Hardesty said.

Panelists District Judge Michael A. Cherry, District Judge Allan Earl, and Saitta, who make up the county's complex litigation group (as construction defect cases are often called), said the law is a step in the right direction and lauded the option for homeowners still disgruntled with home repairs to turn to the Nevada State Contractors Board for guidance -- now a required step before filing a lawsuit.

"I believe that alternative dispute resolution is helpful," Saitta said. "The last place you want a case is in a court of law."

Earl said it was too early to tell if the new construction defect law will do anything to stymie the tide of cases being filed.

The judges expressed concern that the State Contractors Board would be overwhelmed and questioned its ability to issue decisions in the 30-day required time period if the need became too great.

"The problem is, in our state we do not adequately fund the boards we want to look to for guidance," Saitta said.

At the end of the more than two-hour program, Sen. Ray Rawson, R-Las Vegas, told the group that he would support necessary changes to support the law and judiciary.

"I know a lot of subcontractors are hurting. We need to know what to do to refine this and let us give more direction to the courts," he said.

Despite the high numbers on construction defect cases that remain on judicial dockets, the panelists said they are making progress.

Three years ago, the three judges developed a plan to streamline the process that construction defect cases take through the judicial system in an attempt to get them resolved faster.

To that end, Saitta said, they are succeeding. Through June 30, the most recent statistics available, the judges have disposed of 27 construction defect cases, while 25 had been filed.

But the number of pending defect cases remains steady -- about 230 cases are pending at any given time, which has been the case for the past three years, Saitta said.

While that may not seem like progress, it would be much worse without the efforts of the court to streamline cases and get them settled before going to trial, Earl said.

"Without the program, there would be 700 to 800 (construction defect cases) in the system right now," he said.

In the past three years since the consortium of judges formed to hear construction defect cases, they have worked to have meaningful mediation sessions earlier in the process, are trying to limit the number of pretrial motions, and are attempting create some consistency in legal decisions. The key, the panel said, is to settle cases before they reach the trial date, which in many cases is not being postponed for any reason.

"We've learned that once the trial started, that when the boat is out of the harbor, it went to the very end," Earl said. "The lesson we learned was we had to work even harder to get matters resolved before we begin trial."

If a construction defect case reaches trial, it often lasts for months, costing the parties millions of dollars.

The three judges are also working on a set of court rules, similar to local rules that govern how a criminal case proceeds, for construction defect cases. Those rules will outline numerous procedural steps in an attempt to quicken the process.

Subcontractors, legislators and judges agreed that both the system in which construction defect cases are heard -- and the law just passed to keep people out of court -- continues to be in need of fine-tuning.

Ken Cox, president of the Nevada Subcontractors Association and owner of Cox & Sons Plumbing, said the group will be watching SB 241 closely.

"In 2005 we will fine-tune that bill and work on fixing any unintended consequences or loopholes and defend it against plaintiff attorneys," he said.