A MOLD-RIDDEN COURTHOUSE IN SAN Martin, Calif., shuttered since 1999, will find new life as an office building following a $12-million settlement. Announced last month, the settlement concludes a two-year-old lawsuit between Santa Clara County and the project team, including Salinas-based general contractor H.A. Ekelin & Associates, San Francisco-based architect Kaplan McLaughlin Diaz, the contractor's surety, Reliance Insurance Co., and over a dozen subcontractors and suppliers.

In its lawsuit, the county alleged that the building has severe envelope deficiencies, including defects to the exterior insulation and finish system, a synthetic stucco material. The county claims that because the EIFS has no internal drainage, it is susceptible to leakage that damaged the wood framing, exterior sheathing and interior drywall. Destructive testing later revealed extensive mold growth within the exterior wall cavities.

Representatives of H.A. Ekelin, KMD and other project team members could not be reached for comment, but the defendants have previously denied the county's allegations. Following detection of the toxic mold, the county relocated courtrooms, offices, jury deliberation rooms and other functions of the 33,000-sq-ft justice center to temporary modular building' compensation claims against the county and 12 employees filed as yet unresolved personal injury actions against the contractors, architects and suppliers.

The case is "an example of how the mold growth can result in a substantial increase in liability exposure," says Robert A. McGregor, a San Diego-based attorney and the county's co-counsel on the case. "This is a very conservative client. They don't shut buildings down on a whimsical basis."

The Santa Clara County building is at least the second mold-infested institutional building in California to be the subject of a settlement this summer. A $6.1-million settlement announced in June will enable San Diego State University to renovate a damaged dormitory during a year-long closure (ENR 7/23 p. 17).

Rather than use the damaged San Martin facility for its previous purpose the county will probably convert the courthouse "into a generic county office building," says Kevin Carruth, the county's director of general services. To replace the facility, the county will build a $22-million, 60,000-sq-ft justice center in Morgan Hill. The county decided to build a new justice center, not because of the damage to the existing building, but because $7 million in redevelopment funds were available to the city, according to one county official."