A federal judge in Missouri ruled Oct. 31 that Busch Properties is on the hook for more than $11 million it paid to remove mold from 192 condos at Kingsmill back in 2003.
Busch sued National Union Fire Insurance Company in December 2012, alleging the company did not reimburse Busch for the $11.3 million it spent to clear mold out of units that grew due to vinyl wallpaper that stopped moisture in the walls from escaping, according to a complaint filed against National Union in the U.S. District Court for the Eastern District of Missouri.
But Judge Stephen N. Limbaugh ruled Busch was unable to demonstrate the insurance company was legally obligated to pay for the remediation work under the terms of the insurance policy, thus the company was not required to cover Busch’s expenses to fix the condos.
Busch was acting as the property manager at the condos when it became aware in 2003 of the mold problem. The problematic vinyl wallpaper was installed under Busch’s watch, which left the company concerned it would face potential legal action from condo owners and resort guests, according to court documents.
The crux of the legal case was whether the insurance company was legally obligated to pay for damages even though no property owners took legal action against Busch because of the mold. Missouri law requires at least one property owner to take legal action against Busch to satisfy terms of the insurance policy, so Limbaugh sided with the insurance company.
The mold is believed to have started causing property damage in December 2002. By October 2003, Busch personnel discovered crumbling drywall and a wall full of mold after a mirror fell from a wall. An inspection was then undertaken, revealing the widespread extent of the problem.
The company then spent the $11.3 million to fix the affected units, finishing work by summer 2004. Busch Properties stopped managing property in Kingsmill in 2010.
