Texas Jury Awards $1.2 Million To 28 Residents in Mold Case

GALVESTON, Texas — A unanimous Texas state court jury ended a two-week trial on July 23 by awarding $1,238,000 on property damage claims by 28 residents of subsidized housing. Auzston v. Elder, et al., No. 02CV0305 (Texas 122nd Dist., Galveston City.).

Brian Auzston and 27 other residents of the Bay Colony Apartments in Galveston complained that they began experiencing mold problems in December 2001, shortly after moving into the newly built complex. The complex was built and owned by defendant Vestcor Development Corp., based in Jacksonville, Fla. The subsidy was in the form of tax credits.

Management notified residents by letter six months later that concrete had not properly cured and had allowed excessive moisture into the units. Residents complained they were promised a remedy that was not forthcoming, and were told to use bleach to kill visible mold.

Plaintiffs sued Charlene Elder, doing business as Alpha Barnes Real Estate Services, Vestcor Companies Inc., Vestcor Development Inc., and Bay Colony Limited Partnership.

Plaintiffs did not seek personal injury damages, but asked to recover the value of furniture and personal items that were damaged and thrown away.

Plaintiffs also sought damages for mental anguish, damaged credit, attorneys fees, and alleged violations of the Deceptive Trade Practices Act, alleging that defendants demanded sums not due and threatened plaintiffs with eviction without due process, and reported plaintiffs to credit bureaus when they withheld rental payments.

One plaintiff, William C. Hunt, sought an additional one month's rent plus a statutory penalty of $100 for what he termed a bad faith Forcible Detainer lawsuit. Hunt complained that he was constructively evicted because of moisture and mold problems and that the lawsuit, which was dismissed, was harassment.

Other plaintiffs alleged that negative information about them was passed to a credit bureau.

Plaintiffs' only expert witnesses were Ron McKee of McKee Environmental on mold test results and their attorney, Robert Clemens, on attorney fees. Defendants relied on testimony from Elder and another property manager.

Judge John Elisor presided at trial.

Jurors deliberated for six hours, according to counsel, before making the following unanimous findings:

that the Vestcor defendants breached lease agreements with each plaintiff
That all defendants violated the DTPA by committing false, misleading or deceptive acts;
that all defendants failed to comply with written or implied warranties.
That Vestcor entities and the Bay Colony Limited Partnership were 90 percent liable and property manager Charlene Elder (d/b/a Alpha Barnes) was 10 percent liable.

Jurors also found that the DTPA violations were made knowingly and willfully.

Plaintiffs were awarded amounts ranging from $4,000 to $15,000 for personal property losses ($204,500 total), $750 each for damage to credit reputation ($19,500 total), $8,000 for mental anguish($208,000 total) and $25,000 each in exemplary damages ($650,000).

Jurors also awarded$150,000 in attorneys' fees and $71,000 in prejudgment interest, for a total award of $1,238,000. It was reported that Vestcor's insurer is Zurich.

Counsel reported that the Auzston plaintiffs demanded $350,00 at mediation, while the Vestcor defendants offered $48,000. Vestcor increased the offer to $75,000 after the jury reached a verdict but before it was announced.

Robert D. Clements Jr. and Paula Welch of Clements & Associates in Alvin, Texas, represent the Auzston plaintiffs.

Randal Clark of Fahl & Takeuchi in Houston represents Charlene Elder and Alpha Barnes Real Estate Services. Willard Tinsley of Funderburk and Funderburk in Houston represents Vestcor Companies Inc., Vestcor Development Inc. and Bay Colony Limited Partnership.