The owner of a luxury Bal Harbour apartment complex
expects to pay millions of dollars to settle a
class-action lawsuit that claimed the tower was
infested with mold.
Under the settlement, Archstone-Smith will
reimburse tenants for medical bills and property
damage allegedly linked to a mold outbreak last year
at Harbor House South, where units rent for about
$1,500 a month. Plaintiff lawyers say about 800
families or groups of roommates are already identified
as potential plaintiffs, meaning thousands of people
could ultimately join the suit.
The exact scope and cost of the settlement remains
in doubt, though in a September regulatory filing
Archstone-Smith said it estimated the suit and
settlement and related repairs would cost $25 million.
That comes on top of a $38 million tab for ridding the
452-unit tower of mold -- a total that the company
says included repairs planned before the mold problems
arose last year, as well as about $12 million
relocating tenants and replacing their damaged
furniture and clothing.
In a statement released Tuesday, Archstone-Smith
said it thinks it would have won the suit, but decided
to settle ``given the unusual circumstances . . .
unique to Harbor House South.''
The resolution of the case in Miami-Dade County
Circuit Court marks one of the first settlements of a
class-action mold suit against the owner of a
privately-held building.
Mold suits have emerged as one of the
fastest-growing sectors in liability law, a phenomenon
builders and insurers blame largely on opportunistic
attorneys. Lawyers counter mold problems are real, and
often caused by either shoddy construction or lax
maintenance.
Either way, the insurance industry says the rising
number of mold claims threaten its ability to back
homeowner policies, particularly in humid Florida,
where mold is a chronic nuisance.
An Archstone-Smith spokesman said Tuesday the
company hoped to recover a ''significant'' portion of
the settlement costs from its insurance carriers.
Archstone-Smith, a publicly-held company and the
country's largest apartment owner, said it moved
quickly to fix the mold contamination once it
discovered the problem in the summer of 2002. But
plaintiffs say mold was an issue from the time the
Englewood, Colo.-based company bought the building at
10275 Collins Ave. in November 2000, and that the
lawsuit forced Archstone-Smith into action.
''It took the litigation to obtain the appropriate
response from Archstone,'' said plaintiff lawyer Joy
Spillis Lundeen, of the Sterns Weaver firm in Miami.
She said once the clean-up started, Archstone-Smith
acted ''aggressively'' to clean the mold and get
tenants back into the building.
Lundeen is part of the legal team awarded $4
million in fees as part of the settlement, as well as
$300,000 in expenses.
The suit is open to all Harbor House residents and
their long-term guests since Nov. 2000, when Archstone-Smith
bought the building. Payouts will be determined
individually, Lundeen said.
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