$32 Million award in toxic-mold suit slashed

11/13/03

Guest commentary by Brandon Scott, Newsreal?

Austin, TX – In a (in the early days) somewhat high-profile case involving a mold-damaged home, a state appeals court today reduced a jury verdict against Farmers Insurance Group from $32 million to $4 million plus interest and attorneys fees.  Many questioned the fact that the “mansion” involved was considered a low-end mortgage foreclosure house, purchased on the courthouse steps, during the Texas bust days, and purchased by someone who, let’s just say, appeared to put on wealthy airs when they didn’t exist by any means.

However, when this home was purchased for pennies on the dollar and the homeowner alledgedly made herself appear as an heiress and President of a high end PR firm, her exagerations were quickly discovered, but even among the “hype” some truth about the case also appeared.

The Third District Court of Appeals said a Farmers affiliate violated the state Deceptive Trade Practices Act.

But the court rejected the jury’s findings that Farmers committed fraud and failed to deal fairly with Melinda Ballard, who had sued over water and mold damage in her Dripping Springs home that she originally purchased for pennies on the dollar several years before during the Texas recession.

The appeals court left intact a $4 million award for actual damages but threw out $17 million for mental anguish and punitive damages. The court also threw out assorted small fees and ordered that $8.9 million in attorney’s fees be recalculated and likely reduced.

Ballard’s case was probably the most exagerated of many mold claims filed recently against insurers in Texas due to the publicity she raised during the case. Ballard, dressed in a gas mask and head-to-toe white protective suit, was pictured on the cover of the New York Times Magazine last year.  This was one of many stunts that Ballard pulled during her questionable publicity campaign during which time she ran for reportedly ran for public office (and failed by popular vote), began a charity to help fellow mold victims, and countered her own clever  marketing plan by running a series of self-written press release statements about her family and herself, playing the role as a self proclaimed “wealthy heiress done wrong” which further fed the media frenzy.  To this day, many don’t believe her wealthy heiress story to the endth degree. But her altruism is still there.  Although modest donations are requested to pay Melinda Ballard’s salary, they are still less than what they cost originally.  She now charges $100 per year, mostly to public documents that are already available, but perhaps you may get lucky and get some personal assistance from her.

Despite her claims on the fromt page of her website that she has “over 3,000,000 members, neither MHS, MHG, BT, or any other agency that we have talked to even knew of someone who has joined this “group.”  therefore be careful about quantifiers and qualifiers when dealing with this organization because they appear to be quite a bit “overinflated,” sort of like membership numbers bragged about on the POA website; similiar to the “overinflated” worth of Mrs. Ballard, age 49, or the worth of her “mansion” that this supposed “New York heiress” bought as her alleged dream house.  Many exagerations from this party fueled the fire when the huge jury verdict for Ballard (possibly making overly-outrageous claims) last year may possibly sent shock waves through the homeowners insurance industry, which has blamed rising claims for mold and water damage as a key reason behind escalating premiums.  Even followers didn’t blame her, but actually looked up to her to some degree.  This heightened the hysteria and probably made matters worse for the more valid claims in the industry with real people claiming real problems.  I am not lessening Ballard’s claims, but merely being upright about the honesty about lifestyles about everyone involves.  Had everyone been sincere, I doubt we would have had the histrionics we have today, but this is all relative.

Ballard said she would appeal the reduced verdict, which could take the case to the Texas Supreme Court. Se settled for less than 4 milion, split half with attorneys, plus more in court costs for expert witnesses, then dumped her husband in which she had to make more splits.  She probably got nothing and starting this non-profit has helped her make a salary again, but her membership numbers cannot be correct by any means.

In Ballard’s dramatic testimony, which she admitted to getting a vanity face lift, she claimed, “This ruling means “an insurance company can rape and pillage without any form of penalty,” said Ballard. “It’s going to be a blood bath. If there are no penalties to punish bad behavior, what in the hell is going to stop them?”  Honesty in the beginning may possibly have avoided some of the falshoods in the tabloids so the truth could have been more ledgeable to the consumer in the beginning.

Ballard and her husband, Ron Allison, said they had to leave their home in 1999 after toxic black mold made it uninhabitable. She divorced him after the case, and even bragged that she didn’t have to pay through the nose to get rid of him.

Their lawsuit against a Farmers affiliate, Fire Insurance Exchange, went to trial in Travis County. The couple said the company failed to adequately and swiftly cover repairs for a water leak, allowing the toxic mold Stachybotrys chartarum to overrun their home and damage their family’s health. There have been a lot of discrepencies about this case which makes the entire scenario questionable.

The consumer group Texas Watch criticized the ruling, saying it was bad for policyholders.  Especially since the Ballard only paid a few hundred thousand for the house, even though their marketing campaign claims its a “22-room-mansion.” If you notice in any of the press releases, the price of the “mansion” is never mentioned.  That is the catch.  There is an old saying, “If you buy a diamond ring for a dollar, then that’s usually what that’s what the ring is worth.”

“Unfortunately this decision sends a message to insurance companies that says you will not be held responsible if you delay, deny, hassle and mistreat Texas families or Texas claimants,” said Dan Lambe, the group’s executive director.

Ballard, who is also president of her group she calls Policyholders of America, which she claims has more than 400,000 members (Ballard charges membership dues to pay her a modest salary) said insurance companies and not claim-filing homeowners were to blame for rising premiums.

So far, we have yet to see much happen out of this group, but Ballard may have the last laugh.  She cannot possibly think the public is as gullible as this but if anyone listened to her, it is obvious ballard lacks the tactics, diction, and education of an affluent heiress, by any means.  Just my observation as an expert covering stories on similar cases for over thirty years, and yes, I am the same age as Melinda Ballard; no lies or mistruths here.

Disclaimer: This article is solely the opinion of the above credited author, therefore, does not necessarily reflect the opinions of Mold Help; its contributors, writers, advisors, or affiliates.  Mold Help is not liable for the content of this commentary.  MH provides this public service as a right to freedom of speech but by doing such; assumes no responsibility of this submission whatsoever.  Any inquiries to the author can be sent to this site and will be forwarded to the author if deemed appropriate.