Habitat for Humanity Client Plays and Wins the Ghetto Lottery!

Re-posted by Nicholas Stix

Wow. Cheryl Storms played and won the ghetto lottery twice. However, it's not clear from the story if she sued the same organization twice, or two different entities once each. In any event, as my mom always says, "No good deed goes unpunished."

The aspect that makes her claim particularly ridiculous is her assertion that she found the mold before purchasing the home, but went ahead and bought it, anyway.

I suppose grifters like Storms will eventually sue Habitat out of existence.
 

Moldy home suit hits Habitat for Humanity

By Kelly Johnson
January 12, 2003, 9:00 p.m. PST
Sacramento Business Journal

The spread of mold litigation knows no bounds. Ask Sacramento Habitat for Humanity, a charitable group sued twice for mold damage in a house it built.

Travelers Indemnity Co. wants Sacramento Habitat for Humanity to repay what the insurance company spent on mold cleanup, replacement costs and living expenses for a Rio Linda woman who bought a house from the local charitable organization, and helped build it.

That same Rio Linda homeowner, in a separate case, confidentially settled her own lawsuit against Sacramento Habitat for Humanity in December. In her suit, filed in December 2001, Cheryl Storms had alleged faulty construction and personal injuries related to mold.

She had alleged that she and her five children suffered health problems as a result of mold, said her attorney, Evan Williams of Auburn. The house had mold, she claimed, because windows were improperly installed by Habitat.

Many of the family's personal items had to be thrown away; the insurance money reimbursed Storms for only the depreciated value of items; and the family had to live in a motor home on the property for months while repairs were made to the house, Williams said.

Getting a Habitat house is a privilege, Williams said, but Habitat cannot avoid minimal building standards. Also, he said, his client now faces higher insurance rates, if she can even obtain coverage with a mold claim in her insurance history.

"I don't want to impugn the motive of Travelers," said Archie Milligan, Habitat executive director. "There's just a disagreement of cause (of the mold) here."

Milligan's immediate reaction to the suit was to seek out resources to help educate Habitat homeowners on how to prevent mold.

The Travelers suit: Storms and Travelers pursued their action against Sacramento Habitat for Humanity separately.

In the Travelers lawsuit, filed Nov. 22 in Sacramento County Superior Court, the insurance company alleges breach of contract and negligence, among other faults.

Travelers alleges that Habitat for Humanity breached its written agreement by failing to fulfill its representation that the house was free from defects. Instead, the suit claims, the house had structural problems, including windows that weren't properly installed and a faulty slab. Because of Habitat's alleged negligence, Travelers paid for repairs, replaced personal items and paid for interim living expenses that collectively exceeded $145,900.
Travelers declined comment.

No claims of perfection: Storms, who was covered by Travelers from April 2000 to April 2001, leased the house in April 1998 and purchased it in March 2001. In late February 2001, Storms found toxic mold spores throughout the house, the suit says.
The suit alleges "that the house did not have proper ventilation and therefore created a situation where mold grew within the home."

Storms lived in the house two years prior to the purchase, leasing instead of buying because Habitat said she had not completed her required 500 hours of sweat equity. Storms contended she had, but put in more hours to satisfy the requirement. When her obligation to Habitat was completed, the payments she had made previously were put toward the purchase price, Milligan said.

Sacramento Habitat for Humanity found out about the Rio Linda house mold toward the end of the insurance company's remediation work. Although it was not asked to, organization representatives and knowledgeable construction managers visited the house to make sure the mitigation work was being done properly for the homeowner, Milligan said. They removed siding around the windows to see if there was water intrusion from the outside, and pulled back baseboard molding.

"We didn't see any evidence of external water penetration," Milligan said.

Habitat won't say that the house was 100 percent water-tight. "Habitat doesn't make any claims to perfection," he said. But, he added, "we are pretty confident that any construction issue was minor and not the real source of this particular problem."
Public relations damage: Blane Smith, a Sacramento attorney who handles insurance coverage cases, was surprised that Travelers would pursue such a case against a charitable organization that provides housing to the poor and conjures up visions of a smiling former President Jimmy Carter, a famous Habitat volunteer.

Habitat for Humanity International is a nonprofit, nondenominational Christian housing organization. Since 1976, Habitat says it has built more than 125,000 houses in more than 80 countries, including 45,000 houses in the United States.

Filing suit against such an organization "might do more than $149,000 of PR damage," said Smith of Farmer Murphy Smith & Alliston, who is not associated with the case.

Most insurance companies have subrogation departments that chase at least partial recovery from responsible parties of the funds they pay out in claims. Insurers calculate their rates assuming that they are successful some of the time.

"It's a perfectly legitimate thing to do," Smith said. Even so, in this particular case against Habitat for Humanity, he added, "Boy, it just looks bad."

Habitat's Milligan was charitable even regarding the lawsuit. "Being a charitable organization doesn't exempt us from maintaining high standards in our construction work," he said. Because the organization knows its families � and will for years, as the provider of the families' no-interest loan � "our efforts go above and beyond."