Suit against Spall Realty Corp. and two other companies goes to trial June 7, 2010

A Pittsford dentist and his wife are pursuing legal action against Spall Realty Corp. and two other companies for damages suffered due to mold infestation of their newly constructed home in the Settlers Green Development.

Neil Goldstein, D.D.S., and Patti Goldstein allege numerous causes of action in their complaint filed in New York State Supreme Court, including negligence against Spall and Brookwood Building Corp. Weyerhaeuser Co. also is named in the suit because most of the mold grew on the company’s Trus Joist product, which had mold inside of it at the time of installation. At trial, scheduled to begin June 7, 2010, the Goldsteins are seeking $100,000 in remediation expenses and discarded personal property, plus damages for illnesses caused by the mold, property use loss and property devaluation.

Stephen G. Schwarz, managing partner of Faraci Lange LLP, is counsel for the plaintiffs. “Instead of getting the home of their dreams, Neil and Patti Goldstein suffered a health and economic nightmare due to negligence and shoddy construction,” Schwarz said. “This case raises significant questions about Spall Realty, which has set up multiple ‘shell’ companies, apparently to avoid accountability for the homes it is building in the Greater Rochester area. It also raises serious concerns about the safety and desirability of Weyerhaeuser’s Trus Joist product.”

Mold Discovered at 19 Settlers Green

The Goldsteins moved into their new home at 19 Settlers Green in Pittsford in September 2004. They immediately noticed very wet basement walls, and tried unsuccessfully to dry out the basement by constantly running two dehumidifiers. They raised this issue with Spall Realty on several occasions, but the Spall employees told them that as long as there was not water running out of the foundation wall, they were not obligated to do anything about it.

Over the course of 2005, the Goldsteins both began to suffer from frequent upper respiratory symptoms. In February 2006, Dr. Goldstein noticed yellow and white growth on the Weyerhaeuser’s Trus Joists — visible from the basement — that supported the floor above. He discovered that almost every joist was covered with a yellow or white substance that he thought might be mold. Testing confirmed that mold was growing on the joists and dangerously high levels of mold spores were in the air. Months of negotiations transpired but Spall Realty refused to agree to remediate the mold unless the Goldsteins would sign off that they were satisfied with the job in advance of any work being done.

Improper Design, Installation

Following advice of the Monroe County Health Department, the Goldsteins had the mold removed because it posed a health hazard — the levels so high in the basement that if it were a public building it would have to be closed. The Goldsteins also hired contractors to determine what was causing the wet conditions. Contractors determined that the drainage system, gutter system and grading of the property were either improperly designed or installed, causing water to pool against the foundation walls. This caused humidity in the basement and resulted in mold growth.

• The drains around the foundation, which were supposed to take water away from the foundation walls, were not connected to anything.
• The pipe that was supposed to take water from the gutters and the sump pump to the storm sewer in the street was crushed and blocked.

The Goldsteins had to close off their basement for months and to move out of the home while workers dressed in hazard suits with respirators removed the mold. The remediation, including the value of property that had to be disposed of, cost the Goldsteins more than $100,000.

Spall’s Shell Companies

The plaintiffs initially sued Brookwood (the company they contracted with through Spall to build their home) and Weyerhaeuser, seeking recovery of their expenses and compensation for their damages. During the case’s pre-trial phase, it was discovered that Brookwood had no employees and was only a shell corporation through which money was passed from the Goldsteins and other buyers to Spall Realty.

In addition, Brookwood was one of multiple corporations Spall Realty President Ted Spall Jr. had created to try to avoid accountability for defects in any of the homes his company built. Despite the fact that Spall Realty’s Web site (www.spallhomes.com) touts the company as “one of the oldest and most trusted residential builders in Rochester,” Mr. Spall testified that Spall Realty did not perform residential construction and that it was all done by one of his other corporations. During the course of the litigation, multiple lots in the Settlers Green Development, which were listed as owned by Brookwood, were mysteriously transferred to other Spall-owned shell corporations.

Two Companies, No Assets

According to Stephen Schwarz, the latest development in the case involved Spall Realty and Brookwood informing the court, through legal counsel, that the companies have no money and may not defend themselves at trial. There was no explanation about what happened to the assets of the two corporations, one of which has been in business for more than 35 years.