Facts

Karen Kesti was a tenant at Vincent Lau's rental property. Lau owned and managed the property. Kesti claimed that the subject premises deteriorated drastically over the term of her tenancy, which resulted in the intrusion of water and the development of a damp and moldy environment.

Prior to moving into the place, Kesti had a "walk through" with Lau where she pointed out water damage on the ceiling and outer wall of the dining room. Allegedly, Lau stated that he knew about the water damage, but could not repair it until the end of the rainy season. Lau assured her that the damage would be repaired and she moved in based on these assurances. No repairs were ever made since she moved into the unit in March 2008.

Despite Kesti's request for repair, Lau allegedly failed to perform any repair on the unit. She used the dining room primarily as her home office and spent a considerable amount of time in there communicating with her clients. The room allegedly had a dank and moldy odor that persisted despite several attempts to air out the room. She began to develop respiratory problems by mid-September, and by late-Sept. her health had significantly deteriorated. She sought medical treatment for her system on Sept. 23, and was diagnosed with bronchitis.

Nearly a year after Lau promised to repair the water intrusion, a large section of the dining room ceiling and outer wall collapsed during a major rainstorm. Mold spores were spread throughout the entire living area and debris throughout the dining room. Kesti vacated the premises shortly thereafter and her health began to improve. Allegedly, Kesti's persistent wheezing and coughing prevented her from returning to work until early May 2009.

Settlement Discussions

The parties attended pre-litigation mediation with an arbitration board, which settled her claim for rent reimbursement for $2,000 but reserved her personal injury and economic loss claims for mediation.

Damages

Kesti sought $550 for out-of-pocket medical expenses; $20,000 for past lost earnings; $72,000 for future lost earning; and $1,000 for damage to personal property.

Injuries

Mold-related injuries, including severe respiratory distress, eye irritation, interrupted sleep, and painfully hoarse voice, as well as emotional distress.

Result

Plaintiffs submitted a C.C.P. 998 offer to compromise for the policy limit of $100,000. Defendants accepted the offer and a settlement agreement was entered into in lieu of a judgment.