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Toxic mold comp suit can go forward, court rules


SAN FRANCISCO--An injured employee has been allowed to proceed with a lawsuit alleging that Costco Wholesale Corp. fraudulently concealed information about the presence of toxic mold on its property, a California appeals court has ruled.

The plaintiff in Renee Bernadou vs. Costco Wholesale Corp. found water leaking into her office window in Livermore, Calif., beginning in 1995. Ms. Bernadou complained to Costco for years about the leak that wet her office carpet each winter, court records show.

In 2003, her doctor diagnosed her with asthma, possibly related to the flooding at her work site, and she filed a workers compensation claim.

Ms. Bernadou later filed the current suit containing several allegations, including that Costco provided her doctor with a report issued by an environmental testing company that Costco retained, but withheld five of the report's eight pages. She ultimately obtained the entire report and alleged in her suit that Costco knew of toxic mold in the workplace prior to her filing her workers comp claim.

A trial court dismissed other defendants including Costco from the lawsuit after finding several causes of action in the suit were barred by workers compensation exclusivity, among other shortcomings.

However, California's 1st District Court of Appeals disagreed. The San Francisco-based court ruled last Thursday that Ms. Bernadou's complaint adequately met requirements necessary to establish an exception to workers' compensation exclusivity, which prevents workers from suing their employers.