Jordin Isip

Buyers' Remorse

With a second baby on the way, Mary and Keith Cohn decided they had outgrown their two-bedroom bungalow near Rice University. They spent six months house-hunting before discovering Casa Builders' entry into the 2000 Bellaire New Home Showcase. From the leaded-glass front door to the wrought-iron railing leading to the third floor, it was their dream home. "It had everything," says Keith, co-owner of C&M Marketing.

The French Country home is the type of house featured on Home and Garden TV -- it has a subzero fridge, a restaurant-style stovetop and a built-in wine cooler the size of a dishwasher. The kitchen has terrazzo-tiled floors, and the master bath has a Sistine Chapel-style angel painted on the ceiling above the Jacuzzi and remote-control fireplace.

Casa's brochure claims to sell River Oaks-quality homes at outside-the-Loop low prices. Keith and Mary sold their IBM and Sysco stocks and spent all their savings to make a $300,000 down payment on the $770,000 Park Court home.

They moved into the 4,000-square-foot house in May 2000. Two months later, the roof started leaking. The builder sent over a handyman who patched the hole with a silicon caulk gun, Mary says.

The night Tropical Storm Allison swept through Houston, the Cohns' house flooded. It was the only new home on Park Court that flooded. And unlike most water-damaged homes, it wasn't filled with rising water; instead, rain poured through the enormous kitchen window. "It was like breaking an aquarium and letting the water out," Keith says.

In the following months, Mary and their two daughters kept getting sick. Their medical records are full of unexplainable headaches, coughs, stomachaches, sore throats, stuffy noses and sinus infections. Pediatricians couldn't determine what was wrong with the girls, so they prescribed antibiotic after antibiotic. The newborn was given steroids and breathing treatments every four hours.

Having read reports on Texas's toxic-mold crisis, the Cohns hired an environmentalist to test their damp home. Outside, mold levels were 85 spores per cubic meter; inside the kitchen walls mold levels reached 80,000. Major leaks were discovered in the roof, and the Cohns were told to evacuate immediately. "The roof had been leaking since we moved in," Keith says.

The house was gutted from the third story down. Floors, walls and built-in cabinets were ripped out to remove massive amounts of mold. The Harris County Appraisal Review Board reported that the value of the home dropped to $300,000.

The Cohns asked Casa Builders' president, Keith Wagner, to buy back the house. The Cohns said that maybe the house was a lemon, and they were willing to buy another of his homes. Wagner said they could possibly work out an exchange. But Wagner refused to refund the Cohns' full purchase price and never made what the Cohns considered a serious offer.

Wagner doesn't deny that the roof leaked, and he says he feels bad that the Cohns' house flooded. But he doesn't believe faulty construction caused the home's mold. Since the Cohns didn't contact him again until two months after their one-year home warranty expired, he says, he didn't have to repair the roof. But because he liked the Cohns and he wanted to keep his stellar reputation (the only complaint on file at the Better Business Bureau is from the Cohns), he offered to repair the roof on the condition that the Cohns sign a waiver exempting Casa Builders from future liability.

The Cohns refused. They consulted with attorneys who told them they couldn't sue their homebuilder because of the small-print binding arbitration clause in their closing contract.

"They didn't know what it was," says the Cohns' Houston attorney, Jim Moriarty. "The idea that someone's going to cheat them on a three-quarter-of-a-million-dollar purchase never crossed their minds."

So the Cohns did what they could to draw attention to their situation. They hung a five-foot by 15-foot neon-orange sign on the house warning people not to buy a home from Casa Builders. Mary placed red and white magnetic signs on either side of her SUV telling people to call her before considering a Casa home.

Mary received at least three calls a day; her cell phone bill reached $700 a month.

Mary has stopped working as a flight attendant for Southwest Airlines and has dedicated her life to battling her builder, repairing her house and helping future homeowners. "We have more consumer protection on a toaster I would buy from Sears than on the largest purchase of my life," she says.

With her two small daughters in tow, Mary has picketed at home shows and spoken before legislative committees, striving to create a home lemon law and remove mandatory binding arbitration clauses from new-home contracts.

"If you get a bad haircut, you can call a 1-800 number," says state Senator Leticia Van De Putte, D-San Antonio, who authored a bill proposing a home lemon law. "If somebody sells you a bad house, there's no state agency to report it to. Nothing."

Wagner insists that the Cohns' home flooded during Allison, and that since they didn't have flood insurance they're trying to make him pay for damage he didn't cause. "They're trying to blame all of their problems on me," Wagner says. "Their house flooded, and they're looking at me as the bad guy, not Mother Nature."

The Cohns can't sue their builder. But, outraged by the Cohns' signs and media statements, Wagner sued them.

In the last three years, killer mold has made national news. In April, Ed McMahon filed a $20 million lawsuit against his homeowners insurance company for not properly repairing a burst pipe, which he claims caused toxic mold to spread through his home and kill his dog. A week later, a class-action suit was filed against a New Orleans-area sheriff accused of exposing inmates to toxic mold.

Dubbed the next asbestos, mold has been blamed for everything from breathing problems to brain damage. But unlike asbestos, neither the U.S. Centers for Disease Control and Prevention in Atlanta nor the Environmental Protection Agency has set a limit for safe mold exposure, because mold affects individuals differently. There are more than 100,000 species of mold, which grows in warm, wet places. Houston's hot, humid, subtropical climate is an ideal breeding ground. Some people can live happily in a mold-coated home. Others are extremely sensitive. The only way to evaluate if mold is making someone sick is to move out of the moldy house and see if he feels better, says Greg Gebhardt, a Houston certified indoor air-quality manager and president of Corporate Investigative Services.

Researchers across the country agree that mold can cause allergy attacks, stuffy noses and sinus infections. But no one has proved that mold makes people seriously sick.

Toxic mold first gained national attention when a Cleveland, Ohio, pediatrician, Dorr Dearborn of Rainbow Hospital, reported that toxic mold most likely caused 41 babies' lungs to bleed. The CDC funded Dearborn's 1994 and 1997 studies, but the accuracy of the research was contested by outside panels, and the CDC declared the results inconclusive.

Last month, at the San Antonio mold symposium, scientists and environmental health experts said they are trying to dispel the mass mold fear. "The health effect is a real question mark," says Texas Insurance Commissioner Jose Montemayor. "People are very, very convinced in their heart of hearts that it's responsible for all sorts of ailments. We're sympathetic to people who are suffering, but I'm not sure it's related to mold."

Mold, mildew and rot have never been covered by standard Texas homeowners insurance policies, Montemayor says. The exception is if the mold was caused by a covered hazard, such as a water leak. "Our policy was ambiguous enough that people made that connection and chased down those claims to the fullest they could," Montemayor says.

In the mid-1990s the average mold claim cost insurers $4,000, Montemayor says. Today the average claim is eight or nine times as expensive, he says.

Mold claims for the last two years cost Texas insurers close to $1 billion, Montemayor says, which caused premiums for individual policyholders to increase about $200 each.

Recently, insurers wanted to quit covering any mold claims, while homeowners wanted complete coverage at no additional cost. Montemayor negotiated a compromise: Insurers will now provide $5,000 to help clean up mold damage, offering homeowners the option to buy additional coverage.

Texas leads the nation in both the number of mold insurance claims and the number of mold-related lawsuits. In June, a Travis County District Court jury awarded a Dripping Springs family $32 million. Ron Allison and his wife, Melinda Ballard, sued Farmers Insurance Group for not repairing a pipe that caused the toxic black mold stachybotrys to overrun their home.

To combat increased litigation, representatives from California, Maryland, New York and Texas all have asked for legislation to protect and educate the public. During Texas's last legislative session, House Bill 2006, which focuses on mold and indoor air quality in school buildings, was introduced. The bill was left pending in committee.

Also during the last legislative session, Senator Van De Putte introduced Senate Bill 754. The proposed home lemon law says that if a house is deemed unlivable, it will be replaced with a comparable house or returned to the builder for the full purchase price, plus moving and closing costs.

"I knew I couldn't move it out of committee," Van De Putte says. "I didn't have the votes."

There was a brown spot on the ceiling of the Cohns' downstairs coat closet. Digestive enzymes were deteriorating the wet Sheetrock, says Gebhardt, the indoor air-quality manager. On the second floor, he says, the built-in bookcases were rippling and pulling away from the wall. Mold showed through the cracked white paint on the shelves.

Under the kitchen window, Gebhardt found a heavy concentration of green aspergillus penicillium, which often causes allergies and illness. He also discovered trace amounts of trichoderma, which produces antibiotics that can be toxic to humans.

Under the kitchen sink, in dust particles and in air vents, Gebhardt uncovered species of mold including fusarium, alternaria and curvularia, which can be toxic to plants but not people. He discovered large concentrations of aspergillus penicillium in dark, green and gray mold throughout the house. Small amounts of toxic trichoderma were found in the three-year-old's bedroom.

Gebhardt told the Cohns to call their insurance company immediately. A State Farm adjuster arrived on August 10 and told the Cohns to evacuate the house that day. It was the day before the Cohns' daughter Emma's fourth birthday. They had to leave all of her presents and cancel her party.

"They had a very extensive mold problem," says Bob Witakowski, a certified mold remediation specialist for Trinity Remediation.

The kitchen cabinets were removed, as were the built-in cupboards in the dining room and utility closets. The wood floors on the first floor were ripped up, and the Sheetrock was torn off the walls.

It took three months for remediators to scrape mold off the wall studs, apply biocide, then scrape the wood again before slathering it in a mold-prevention sealant. Negative air machines and air scrubbers still run to capture moldy dust particles.

Mary says when she told a representative of Casa Builders about the environmentalist's report, he said the whole toxic mold scare was a hoax and mailed her a coupon to have her air ducts cleaned.

Three major leaks were found in the Cohns' roof, according to a report by Arrow Consulting Corporation, which inspected the roof for State Farm. One was found at the front of the house that drenched the coat closet; another soaked the built-in bookshelf; and a third leak was discovered by the back left corner of the patio. The report says that past repair attempts have been "incorrect, ineffective and did not address this situation."

The report recommends that the front portion of the roof be redesigned because of the way the roof slopes; instead of shedding water, it collects moisture, which can leak through the shingles into the house. Plus, the wrong shingles were used on the back patio roof. And instead of being angled, the roof was flat and collected water.

In addition, inspectors found exposed nails, poorly detailed copper dormers, and said the wrong kind of caulk had been used. Also, the report says the gutter was improperly installed, and that the stucco cracked because it was put on after the flashings and had not been properly sealed. Plus, felt had not been laid beneath many of the shingles, and portions needed to be ripped up and relaid to conform to current roofing standards.

"That's just basic roofing 101," Mary says.

A Leak Detection and Plumbing Services reported that the water heater line was leaking and slowly dripping water in the attic. The toilet in the half-bath was installed improperly and was leaking around the base, and the air conditioner's drain line was dripping into the kitchen.

The Cohns called Wagner, who obtained two estimates from Brinkman Roofing Company to repair the roof. One estimate was for $8,500 to fix the problems the Cohns' inspectors found, and another was for $13,127. The first estimate provided a one-year warranty. The second came with a five-year warranty and included installation of new, 25-year shingles, felt underlayment, roof flashings and ridge vents.

Wagner offered to pay for the less expensive of the two options. "I offered them what I felt like was more than what I needed to -- more than what the contract called for," Wagner says. "I could've fixed the thing for $500; $8,500 is more than I spent to build the roof in the first place."

That's when he asked the Cohns to sign the waiver releasing Casa from future liability and ensuring that the Cohns' insurance company wouldn't sue.

Mary told Wagner that her insurance company planned to try to get its money back from his insurance company. Mary informed Wagner that she wanted him to fix her roof properly (which to her meant the more expensive estimate).

"His last words to me were 'I'd rather spend my money on an attorney,' " Mary says.

In December, the Cohns hung the bright orange banner that says, "Before considering Casa Builders, Call Us. They do not stand behind their work. 832 444 5802."

Two months later, Casa sued the Cohns. Wagner asked Harris County District Judge Levy Benton to grant a restraining order forcing the Cohns to remove their sign. Wagner's attorney, Terrie Sechrist, wrote in the motion for the restraining order that if the sign remained, Casa would suffer "extraordinary damage" to its business reputation and loss of clientele.

"I had to defend her for saying the guy builds houses made of straw," Moriarty says. "They were accused of slandering this guy by saying he built tacky, crappy houses."

The judge said that technically the sign wasn't entirely accurate since Wagner had offered to repair the roof. But legally, the judge said, he couldn't force the Cohns to remove the sign.

"The law in Texas is you get to bad-mouth your builder, and if he doesn't like it, that's tough," Moriarty says.

Wearing a miniature plastic lemon pinned to her pink sweater, Mary sits in the state capitol attending the House subcommittee hearing on binding arbitration. This is Mary's third trip to Austin to speak at the capitol. She has several speeches prepared. She's testified about mold, binding arbitration and the home lemon law. "She's made it a crusade of hers to try and get some of these laws changed," Keith says.

She mailed certified letters to the Bellaire city attorney, city manager and city developer. She's spoken at city council meetings, appeared on television newscasts and written to both her state representative and the attorney general.

"I've changed Mary's name to Erin Brockovich," says her mother-in-law, Judy Cohn.

There are 23 people listed on the agenda to testify this May afternoon. But every seat in the room is packed with unhappy homeowners who want to speak about their damaged homes and distraught lives.

Everyone tells the same story: They didn't read the fine print on their closing contract, and they didn't realize that if they went into binding arbitration, it would cost a lot of money and they would probably lose because arbitrators are usually developers who side with the builder.

"You can't win," Mary says. "It's like you going with him and four of his drinking buddies."

To enter into arbitration, Mary would have to pay a nonrefundable $8,000 filing fee. Plus, she would have to pay three arbitrators $2,000 a day in addition to paying for the mediation room and stenographer.

During the break, Mary hands out flyers inviting people to come to the home-show protest she's planning. She smiles and greets people with the honey-roasted-peanut charm of 16 years as a flight attendant. She meets someone who attends Bible study with home builder David Weekley. She asks if she can come to class one night and ask Weekley what Jesus would do about her moldy home.

Even though she hates public speaking and wanted to throw up during the ride to the capitol, she feels it's important to get up in front of lawmakers and tell her story.

"There's nothing else we can do," she says.

The Cohns repeatedly asked Wagner to buy their house back. Wagner says he doesn't want their house. "Their house flooded," he says flatly. Why would he want a water-damaged house?

"If the house filled up with rainwater from the roof, then by all means, I would be right behind them," he says. But he doesn't think the flood was remotely his fault. "Their contingence that all of the mold in their house is a result of the roof leak, to me, is a little unrealistic," he says.

He says he fixed the leak originally reported after the Cohns moved in, and they didn't complain again until a couple of months after Allison. He says if the roof was constantly leaking, they would have told him before their one-year warranty ran out.

"She's trying to be my worst enemy," Wagner says. "Frankly, it's just hard work keeping up with what she's trying to do."


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