Mold Litigation: The Next Growth Industry for Lawyers?, By Thomas D. Jensen
Hundreds of millions and counting - dollars that is, although they could be spores. Hardly a month of CLE program mail goes by these days without some reference to mold litigation, accompanied by lots of rhetoric such as "the next asbestos." This article reviews this new wave of litigation, its opportunities and pitfalls. Property owners, general contractors, subcontractors, design professionals, realtors, property managers and others are at risk to being drawn into this morass in which insurers may, or may not, provide coverage. Counsel for such clients are well advised to stay current on mold litigation developments.
In North Dakota, mold claims became newsworthy at the Turtle Mountain Indian Reservation. As a result of heavy rains and flooding in 1997, soil in the area became saturated. Water collected in the basements and crawl spaces of homes located on the reservation creating ideal conditions for mold growth. By 2001, residents were reporting a variety of respiratory, ear, eye and sinus infections, other flu-like symptoms, headaches and asthma. Politicians became involved, and then mold claims were in the newspapers. The North Dakota Department of Health took notice and declared that mold is one of the major indoor air quality issues in the state.
Here and elsewhere, the stakes are huge. On October 23, 2002, the Texas Third Court of Appeals heard argument on Melinda Ballard's $32 million judgment against her homeowner's insurer arising out of mold contamination in her home. The jury verdict included sums for compensatory damages, punitive damages, emotional distress and attorneys' fees. Her case is but one of thousands. It has been estimated that through 2001, 5,000 mold-related claims were pending against insurers in bad faith actions, 2,000 claims were pending against contractors for construction defects leading to mold, 2,000 claims were pending against homeowners' associations for improper maintenance leading to mold, and 1,000 claims were pending against home sellers for reasons related to mold. In Texas alone, insurance indemnity, defense and investigation expenses exceeded $1 billion for mold claims through 2001. Claims were up 560% from 2000 to 2001. Mold litigation indeed is a growth industry.
Molds and Their Causes
Molds are a member of the fungi "kingdom," being neither plants nor animals. They include not only molds themselves but also mildew and other microorganisms. They reproduce by making spores that spread readily and are capable of surviving a long time. Moisture and food are required for growth, and growth is enhanced by warm, damp, and humid conditions. Therefore when mold spores land on a damp spot indoors, they may begin growing and digesting whatever they are growing on. The digestion process is powered by enzymes secreted by the mold that break down the environment into digestible pieces. These enzymes require water to be chemically active. The more molds eat, the more they grow until they run out of damp material and oxygen. As a result, molds gradually destroy the things they grow on. In good conditions, wet drywall may be covered with millions of spores per square inch in a week or two.
Molds are diverse. In U.S. homes alone, more than 1,000 kinds of mold have been found. Examples include Acremonium (can be found on moist walls), Alternaria (tends to grow on carpets), Aspergillus (commonly present in indoor air), Aureobasidium (has an affinity for bathroom walls and shower curtains), Chaetomium (frequently spotted on drywall paper), Cladosporium (grows on fiberglass duct liners), Penicillium (found on wallpaper), and Stachybotrys (attracted to building materials with high cellulose and low nitrogen content). But knowing the type of mold present in a building is not usually very important because any indoor mold growth presents a problem.
Molds are not always observable within buildings. Direct evidence of their presence is reflected in discoloration, staining, or fuzzy growth on the surface of building materials. Circumstantial evidence of their existence may be reflected in areas of water stains or noticeable odor. But molds may also be growing in areas not visible, such as behind sheetrock, under carpet, and within insulation. In other words, a building may present a serious problem of mold infiltration without anyone knowing of it. Controlling excess moisture is the key to preventing and stopping indoor mold growth.
Why the Sudden Interest in Mold?
Molds have existed probably from the beginning of time. Why did it take until the 21st century for molds to become a medical and legal problem? The answer lies in recognition of the ramifications of well intentioned, but inadequately researched, policy initiatives combined with medical causation research advances. The mold story today in regard to building construction is a perfect example of the law of unintended consequences.
In the interests of energy efficiency, policymakers in recent years concluded that keeping buildings as air tight as possible would cause indoor air to stay at comfortable human levels using less energy. Heated indoor air in winter, for example, would remain longer in homes thus reducing the amount of furnace usage necessary to maintain acceptable environmental conditions. Building codes were then modified to require buildings to be built "tight," via the use of exterior plastic and similar sheathing material, to keepair in. Elimination of interior draftiness and reduction in heating costs soon followed. Where did this go wrong?
The vapor barriers prevent airflow through building walls. Therefore any moisture that may penetrate the wall, through negligent construction methods or defective wall components, cannot evaporate readily. The water then persists on the wooden structural members of the building's walls. Wall insulation keeps temperatures at mold-conducive temperatures, and thus ideal circumstances exist for the growth and proliferation of molds. As the structural wooden members of the wall rot, the building residents are caught unaware. Human-affecting levels of mold thresholds climb that reach building interiors, while the structural integrity of the building is compromised. Personal injury and property damage claims are thus born.
Moisture Entry and Mold Growth Areas
Water can enter structures via flooding, wet basements, plumbing leaks, improper landscaping design or poor maintenance whereby the masonry foundation/wooden structural base ends up underground leading to rot, and otherwise. Moisture-laden air resulting from excess mechanical humidification, shower usage, and the like, may penetrate interior walls. Window manufacturing defects, window installation defects, exterior wall flashing defects, caulk application errors, roof leaks, improper use of exterior wall sheathing materials, and similar construction-related errors afford easy water infiltration points. Exterior wall building materials, such as stucco and synthetic stucco are more prone to water penetration than other siding forms. In addition, condensation pans and other components or malfunctions in HVAC systems may serve as mold growth platforms.
Mold-related Health Effects
Although most molds have no documented human health effects, certain molds do. To a significant extent, however, health effects associated with mold exposure are poorly understood. The causation uncertainty presented is due to the wide variety of molds, variations in human sensitivity, and emphasis of medical research resources towards more debilitating diseases. Nevertheless, medical science has progressed to the point that the following conclusions may be drawn.
Two mold-produced toxins, Aflatoxins and Ochratoxin A, are considered human carcinogens. However, other severe conditions some researchers link to mold such as bleeding from the lung or memory impairment, have not been substantiated scientifically. But it is well established that asthma attacks and hypersensitivity pneumonitis can be triggered by mold exposure. Milder allergic symptoms such as rhinitis, wheezing, shortness of breath, eye problems, dry cough, sore throat and rashes are common problems experienced by mold-sensitive persons. particularly susceptible are those persons with preexisting respiratory problems, those with compromised immune systems, the elderly and the very young. Medical causation invariably is a hotly-contested issue in mold personal injury claims related to indoor air, because the dueling experts are well armed.
Mold-related Property Damage
Rotten wood members in structural walls caused by mold present significant repair considerations and costs. Costs must be incurred to test for the presence and extent of wood failure. Costs may be necessary to remove exterior and/or interior wall surfaces to perform the work. Costs may be necessary to remove and replace entire wall systems. Costs may be necessary to re-locate building residents during the period of repair. Costs may be necessary to install improved interior HVAC systems. Costs may be necessary to revise surface water drainage patterns or to install roof gutters. This adds up. It should be obvious that the magnitude of these potential damages claims may appeal to contingent fee counsel. Moreover, litigation of property damage claims by plaintiffs' counsel avoids risks inherent in the presentation of more subjective damages elements involved in personal injury litigation. Juries need not wonder whether the property damage numbers presented by plaintiff's attorney at trial are subjective or represent malingering.
Plaintiffs' Litigation Considerations
Assuming the elements of proof of mold existence and mold-related personal injuries or property damage are present, plaintiffs' counsel face several preliminary claim considerations. If no mandatory arbitration clause is present in any applicable contract between parties, counsel bringing district court actions ought to focus on the considerations that follow.
Available Causes of Action
Mold personal injury and property damage claims share common causes of action. Negligence, breach of contract and breach of warranty causes of action may lie against contractors and building component distributors when construction defects trigger mold growth. Negligence, breach of warranty and strict liability claims may lie against building component manufacturers. Malpractice claims may lie against architects and engineers involved in construction planning. Intentional fraud, negligent misrepresentation and breach of contract claims may lie against building sellers. In addition, statutory covenant of habitability claims may lie in favor of residential tenants against landlords, as well as premises liability claims against owners.
Whom to Sue
Potential defendants include the property owner, developer, architect, general contractor, subcontractors (e.g., carpentry, mechanical, HVAC, plumbing, roofing, and landscape), manufacturers and distributors of building components (e.g., windows, caulking, wall components, and HVAC), landlords, maintenance companies, property managers, realtors and construction engineers.
Retention of Experts
Expert witnesses who may be necessary in mold claims include medical experts (e.g., allergist, immunologist, mental health care professionals, family physician, pulmonologist), scientific experts (e.g., mycologist, microbiologist), construction experts (e.g., architect, general contractor, subcontractor specialists, design engineer, mechanical engineer), and testing and remediation experts (e.g., industrial hygienist, air quality testing agency).
Prevention of Spoliation of Evidence
In the course of a property owner's examination of mold-impacted property, it is possible that evidence relating to the claim may be lost along the way. North Dakota courts will dismiss cases in which plaintiff has destroyed evidence innocently that is vital to the defense.
Building Code Research
Provisions of the various building codes ought to be reviewed insofar as they may address wall sheathing, ventilation or other requirements that could implicate mold prevention construction measures. Code sections may also establish a basis upon which to request a negligence per se jury instruction.
Defendants' Litigation Considerations
Defense preparation in a mold case involves measures typical of tort defense efforts. Following service of written discovery requests, and the search for suitable experts, defense counsel ought to focus on the considerations that follow.
Limitations and Repose Statutes
In North Dakota, breach of contract, statutory liabilities, negligence, fraud and products liability actions must be commenced within six years of the date of discovery of the loss. Malpractice claims must be commenced within two years of the date of discovery of the loss. Claims for breach of warranty ordinarily must be brought within four years of the date of tender of delivery, unless the warranty extends to future performance. A statute of repose, however, applies to personal injury or property damage claims arising out of improvements to real property. Such claims are barred more than ten years after substantial completion of construction if the claims involve deficiencies in the design, planning, supervision or observation of construction. Repose statutes of this nature are especially important to consider in mold actions because oftentimes mold - being within walls for example - is discovered long after it begins to form.
Other Affirmative Defenses
In addition to possible limitations/repose statute defenses, several other affirmative defenses may apply to mold claims. Prejudicial late notice may be raised as a defense to breach of warranty claims; in North Dakota notice must be given within a reasonable time or the buyer's remedy is barred. In cases of mold creation due to flooding or other natural conditions, the act of God defense may apply. In cases involving residential landlord/tenant actions, the statutory tenant maintenance obligations defense may be raised. Products liability defendants may have available the unforeseeable product alteration defense, the statutory non-manufacturing seller defense, and the statutory rebuttable presumption against defects defense.
Third-party Practice Joinders
It is typically in the interests of defendants to join to the action any actors involved in the conditions giving rise to the dispute pursuant to N.D.R. Civ. P. 14. Involvement of additional parties spreads the risk and increases funding sources for settlements.
Search for the "Empty Chair" Cause
Injury causation in personal injury claims is an especially pertinent defense in mold litigation, inasmuch as the injuries often alleged, e.g., allergies or other respiratory problems, are multifactorial in nature. Plaintiff's symptom complaints may be causally related to other conditions or to actors not joined to the action.
Dispositive Motion Practice
Preparation of the case to set up summary judgment motions on causes of action and damage claims alleged is of course essential.
"Junk Science" Attack
Defendants must be prepared to challenge the admissibility of plaintiff's expert's opinion testimony to the extent it may lie in the realm of "junk science," under the applicable North Dakota standard. Because mold injury medical science is not well developed, good opportunities to thwart plaintiff's causation claims may exist before or during trial.
Insurance Coverage Considerations
Mold contamination may give rise to property and liability insurance claims.
Policyholders with mold infestation may present claims to their property insurer to recover costs associated with remediating the contamination. This may include homeowners' policies, business owners' policies (including, as well, business interruption coverage), and homeowners' association policies. These policies afford coverage for the insured's property losses, subject to various policy exclusions, including the so-called "mold exclusion." The policies must be scrutinized carefully inasmuch as policy language variations exist, because the insurance industry has sought to reduce its mold claim exposure.
In an early mold insurance case, Twin City Hide v. Transamerica Insurance Co., 358 N.W.2d 90, 92 (Minn. App. 1984), the Minnesota Court of Appeals held that a property claim for damage to hides stored in a factory with a leaky roof was excluded under the plain meaning of the policy exclusion for loss caused by "mold, wet or dry rot, and contamination." The Minnesota court then reviewed a later version of the standard homeowner's policy in the unpublished decision of Sather v. State Farm Fire & Casualty Insurance Co., 2002 Minn. App. LEXIS 277 (2002). In Sather, storms damaged the insureds' home and they presented the property claim to State Farm. Water infiltration resulted in the growth of mold. After making one payment to remediate the mold, the insurer declined further payments. The policy included the following exclusion:
The court held that the plain language of the policy "excludes coverage for mold-related damage." Because the argument was not raised in the district court, the appeals court refused to consider whether the exclusion would prohibit claims for personal property mold damage.
In Arizona, Shirley Cooper presented a plumbing leak claim to her insurer and then mold was discovered. Although the insurer paid the property repair loss it denied coverage for the damage caused by mold. The policy excluded coverage for "mold, wet or dry rot" (exclusion 6(c)) regardless "of any other cause or event contributing concurrently or in any sequence to the loss." But the exclusion contained this exception:
(emphasis added). Because the mold exclusion is within "items 2 through 8," Cooper argued that her mold loss was a "resulting loss" from the plumbing leak and therefore was covered under the policy. In Cooper v. American Family Mutual Insurance Co., 184 F. Supp. 2d 960 (D. Ariz. 2002), the court evaluated this argument according to the "efficient proximate cause" rule under which coverage is found to exist when the insured can identify an insured peril as the proximate cause of the loss even if subsequent or concurrent events are specifically excluded from coverage. 184 F. Supp. 2d at 962. The court held that the exception to the exclusion did not apply inasmuch as mold was "excluded" in the policy. Only separate (and unexcluded) losses resulting from the original excluded peril, the court continued, would be "covered" by the exception. 
A contrary mold exclusion property insurance case is Home Insurance Co. v. McClain, 2000 Tex. App. LEXIS 969 (2000). Rainwater leaked through a new roof of the McClains' residence and collected between the studs of the interior walls. When the coverage claim was presented to their insurer, Home Insurance relied upon the "rust, rot, mold or other fungi" exclusion in denying the mold remediation claim. Like American Family in the Cooper case, the Home policy contained an exception to the exclusion by which any "ensuing loss" would be covered but only if "the loss would otherwise be covered under this policy." In rejecting the insurer's argument, the court noted that it was uncontroverted "that the damages claimed were a consequence of water leaking from the roof." Therefore the court held that the mold exclusion "does not apply to the McClains' claim." 2000 Tex. App. LEXIS 969, at 3.
In addition to the mold exclusion, the pollution exclusion found in property insurance policies also can be triggered in first-party coverage disputes. In Lexington Insurance Co. v. Unity/Waterford-Fair Oaks, Ltd., 2002 U.S. Dist. LEXIS 3594 (N.D. Tex. 2002), the court evaluated the pollution exclusion in regard to the policyholder's mold damage claim. The exclusion voided coverage when a "contaminant or pollutant" is the subject of a "release, discharge, escape or dispersal;" contaminant or pollutant was defined to include "fungi." The insured argued that no release, etc., was involved because its expert claimed that the mold was merely "there." Relying upon the insurer's expert's testimony that indeed mold spores were dispersed within the property, the court granted summary judgment in favor of the insurer.
These cases demonstrate that the property insurance policy must be carefully analyzed to ascertain whether a first-party mold claim can thread the needle of the policy's exclusions or any exception to the exclusions so that coverage may be found. In addition, because of increased regulatory activity by states overseeing insurer efforts to strengthen mold exclusions in policies, state insurance or commerce departments ought to be inquired of to determine whether such exclusions are approved for use in the state.
Insurance coverage is also pertinent in the evaluation of third-party liability claims when suits are brought for negligence allegedly leading to mold contamination and resulting property damage or bodily injury. Types of policies involved may include commercial general liability ("CGL") policies (sold, for example, to contractors and subcontractors), errors and omissions policies (e.g., architects, engineers), and product liability policies (e.g., component suppliers). In view of the plethora of policy forms no summary of insurance coverage can be comprehensive in an overview of this nature. Therefore the usual analysis of third-party coverage is apropos in any particular case based upon the policies in question. That analysis no doubt must focus on the coverage grant (i.e., is there an "occurrence" or accident involved?), on the policy exclusions (i.e., do the product, work, pollution, or contractually assumed liabilities exclusions apply?), and on the policy conditions (i.e., was notice given to the insurer as soon as practicable?). In addition, if mold conditions have persisted over several policy terms and multiple insurers, additional issues are raised involving trigger (e.g., actual injury, manifestation, exposure or continuous trigger), and scope and allocation (e.g., does any chosen policy pay "all sums" regardless of multiple policies, or are insurer/policyholder contributions shared based on time on the risk and periods of non-coverage?).
Few third-party coverage claims involving mold have been reported. Cases from Wisconsin and Florida, however, are instructive on the coverage issues presented in the mold context. In Leverence v. United States Fidelity & Guaranty, 158 Wis. 2d 64, 462 N.W.2d 218 (App. 1990), the Wisconsin Court of Appeals held that although damage to the contractor insured's customers' homes and repairs to the same were excluded by the product and work performed exclusions, damage to other property and bodily injuries due to mold exposure were covered. The court also found that the standard pollution exclusion, that did not expressly refer to mold, was inapplicable because mold growth is sudden and accidental and does not involve a release of contaminants
In Stillman v. Travelers Insurance Co., 88 F.3d 911 (11th Cir. 1996), the Eleventh Circuit federal court reversed the district court that - like Leverence -- also held the pollution exclusion inapplicable in a mold case. (The reason for the reversal was that the district court failed to consider other exclusions raised by the insurer before entering a final judgment.) The district court found that the exclusion was ambiguous because "pollutant" was not defined in the policy.
Increased public awareness of mold's adverse effects resulting from the confluence of notorious cases, tight buildings, and medical advances has attracted litigators' attention. Property damage, personal injury or insurance coverage cases involving mold are likely to grow. This overview should equip practitioners to respond to initial inquiries from clients or potential clients about mold and its consequences.
See, e.g., Is Mold the Next Asbestos?, I.E.A. Envtl. Consultant (Fall 2001).
See Connie Krapp, New Development Springs Upas Victims Flee Black Mold, Northern Notes (Mar. 2002).
See, e.g., Conrad to Tour Moldy Reservation Housing, Fargo Forum (July 6, 2001); Mold Forces Evacuation, Grand Forks Herald (Aug. 18, 2002).
N.D. Dep't of Health, Indoor Air Quality Monitor (Apr. 2001).
Ballard v. Fire Ins. Exch., App. No. 03-01-00717CV (Tex. Ct. App. 2002).
 Robert P. Hartwig, Mold and Insurance:Truth and Consequences (Ins. Info. Inst. Aug. 2002).
 It has also prompted proposed federal legislation. The United States Toxic Mold Safety and Protection Act (H.R. 5040) was introduced in the 107th Congress.
 Stephen C. Redd, State of the Science on Molds and Human Health, App. 003 (Centers For Disease Control July 18, 2002).
 U.S.E.P.A., Mold Resources (last updated May 20, 2002).
 Harriet A. Burge, The Fungi: How They Grow and Their Effects on Human Health, Heating/Piping/Air Conditioning Eng'g (July 1997).
 McGregor Pearce, Mold Sampling and Diagnostic Service - Indoor Air Quality Investigations, Mold Biology (Minn. Contin. Legal Educ. Oct. 2002).
 U.S.E.P.A., Mold Remediation in Schools and Commercial Buildings, 2 (Mar. 2001).
 Redd, supra note 9, at App. 003.
 Cheryl A. Sykora, Microorganism Information (Minn. Contin. Legal Educ. 2002); Nat'l Ctr. for Envtl. Health, Questions and Answers on Stachybotrys Chartarum and Other Molds (last reviewed Nov. 15, 2002).
 Minn. Dep't of Health, Indoor Air Unit, Testing for Mold (July 2002).
 Minn. Dep't of Health, Indoor Air Unit, Mold in Homes (Oct. 2001).
 See U.S.E.P.A., supra note 15, at 2.
 See generally N.D. Dept. of Health, Indoor Air Quality Info. Sheet, Mold in My Home: What Do I Do? (June 1999).
 A common synthetic stucco is known as Exterior Insulation Finishing System ("EIFS"). EIFS claims involving mold are also proliferating.
 For example, unlike many airborne contaminants, threshold limit values (TLVs) do not as yet exist for airborne concentrations of molds or mold spores. U.S.E.P.A., supra note 11.
 U.S.E.P.A., supra note 15, Appendix B, at 41.
 Redd, supra note 9, at App. 011; Nat'l Ctr. for Envtl. Health, supra note 18 (noting that the Centers for Disease Control says mold's link to acute pulmonary hemorrhage in infants has not been proven).
 N.D. Dept. of Health, Indoor Air Quality Info. Sheet, Mold in School: What Do We Do? (Mar. 2000).
 Minn. Dep't of Health, Indoor Mold: Health Hazard Identification and Control, 2 (Mar. 20, 2001); Nat'l Inst. of Allergy and Infectious Diseases, Mold Allergy (Feb. 1998).
 See, e.g., New Haverford partnership v. Stroot, 772 A.2d 792 (Del. 2001) (noting that plaintiff successfully called a mycologist (mold specialist), a microbiologist, an environmental and occupational medicine specialist, a pulmonary medicine specialist, and a neuropsycologist). For a defense-oriented analysis of the medical issues, see Ronald E. Gots, Mold and Mold Toxins: The Newest Toxic Tort, 8 J. Controversial Med. Claims 1 (Feb. 2001).
 Cf. Carlson Homes, Inc. v. Messmer, 307 N.W.2d 564 (N.D. 1981) (recognizing the validity of such causes of action against a contractor involved in landscape work that led to erosion); Dobler v. Malloy, 214 N.W.2d 510 (N.D. 1973) (holding that express warranties and an implied warranty of fitness may extend from the contractor to the owner).
 See N.D. Cent. Code § 47-16-13.1 (landlord's maintenance obligations). An implied warranty of habitability or fitness in commercial leases does not exist. B.W.S. Investments v. Mid-Am. Restaurants, Inc., 459 N.W.2d 759 (N.D. 1990).
 See Bachmeier v. Wallwork Truck Centers, 544 N.W.2d 122 (N.D. 1996).
 The North Dakota Legislature authorized the Department of Commerce to adopt the Uniform Building Code and similar codes. See N.D. Cent. Code § 54-21.3. For a discussion of applicability of UBC sections in a mold personal injury (i.e., allergies) case, see Mondelli v. Kendel Homes Corp., 262 Neb. 263, 631 N.W.2d 846 (2001).
 N.D. Cent. Code § 28-01-16. The ten-year statute of repose for products liability actions set forth in section 28-01.3-08 was declared unconstitutional in Dickie v. Farmers Union Oil Co., 2000 ND 111, 611 N.W.2d 168 (2000).
 N.D. Cent. Code § 28-01-18. Architects and engineers come within this rule. See Sime v. Tvenge Associates Architects & Planners, P.C., 488 N.W.2d 606 (N.D. 1992) (involving alleged carbon dioxide releases from a ventilation system). The two-year limitations period does not apply to putative malpractice claims brought against tradespersons. See Jilek v. Berger Elec., Inc., 441 N.W.2d 660 (N.D. 1989).
 N.D. Cent. Code § 41-02-104.
 N.D. Cent. Code § 28-01-44. The ten-year statute of repose does not apply to construction product suppliers. See Blikre v. ACandS, 1999 ND 96, 593 N.W.2d 775 (1999). The statute also carves out owners and others in possession from its ambit, so that routine premises liability claims face no repose deadline.
 N.D. Cent. Code § 41-02-70(3). Sufficiency of the notice and determination of reasonable time ordinarily are questions of fact. Industrial Fiberglass v. Jandt, 361 N.W.2d 595 (N.D. 1985).
 See N.D.J.I. C-10.40.
 See N.D. Cent. Code § 47-16-13.2.
 See N.D. Cent. Code § 28-01.3-03.
 See N.D. Cent. Code § 28-01.3-04.
 See N.D. Cent. Code § 28-01.3-09.
 Compare City of Fargo v. McLaughlin, 512 N.W.2d 700, 705 n.2 (N.D. 1994) (citing N.D.R. Evid. 702 and Daubert v. Merrill Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993) without expressly adopting Daubert) with State v. Brown, 337 N.W.2d 138, 148 n.6 (N.D. 1983) (noting that North Dakota has never directly adopted the "general acceptance" standard of Frye v. United States, 293 F. 1013 (D.C. Cir. 1923)).
 2002 Minn. App. LEXIS 277, at 2.
 Accord Myers v. State Farm Fire and Cas. Co., 2002 Minn. App. LEXIS 854 (2002) (holding in an unpublished opinion that the "resulting loss" exception to the exclusion did not resurrect coverage for the excluded mold loss); Merrimack Mut. Fire Ins. Co. v. McCaffree, 486 S.W.2d 616 (Tex. App. 1972) (same).
 Accord Bruce Oakley, Inc. v. Farmland Mut. Ins. Co., 245 F.3d 1027 (8th Cir. 2001) (holding that exception to mold exclusion for "ensuing fire" established coverage because fire was not otherwise excluded); Bowers v. Farmers Ins. Co., 991 P.2d 734 (Wash. App. 2000) (finding that the efficient proximate cause of the insured's mold loss was the unexcluded vandalism loss, and therefore the mold claim was not excluded).
 See Fisher v. Am. Family Mut. Ins. Co., 1998 ND 109, 579 N.W.2d 599 (1998) (noting that the product and work exclusions avoid coverage to the insured's product or work, but not for damage caused by the insured's product or work).
 In Emcasco Ins. Co. v. L&M Dev., Inc., 372 N.W.2d 908 (N.D. 1985) the supreme court again held that the warranty exception to the contractually assumed liabilities exclusion in the CGL policy created coverage for breach of warranty claims asserted against a real estate developer.
 See Finstad v. Steiger Tractor, Inc., 301 N.W.2d 392 (N.D. 1981) (noting that to avoid coverage the insurer must demonstrate appreciable prejudice).
Thomas D. Jensen is a member of the North Dakota, Minnesota and Wisconsin bars. A Civil Trial Specialist certified by the National Board of Trial Advocacy, Mr. Jensen practices with Lind, Jensen, Sullivan & Peterson, Professional Association, 1300 AT&T Tower, 901 Marquette Avenue South,Minneapolis, MN 55402 (612) 333-3637).
The author is grateful for David S. Maring's review and comments relating to this overview. Mr. Maring is a member of the North Dakota and Minnesota bars. Also a Civil Trial Specialist certified by the National Board of Trial Advocacy, he practices with Maring Williams Law Office, P.C., 400 East Broadway, Suite 307, Bismarck, ND 58501 ((701) 224-0430).