Case Background
Steven Varkony filed this civil action on May 28, 2021, in the Superior Court of California, County of Los Angeles, under Case No. 21STCV20174. The lawsuit named El Dorado Villas, LLC, Murietta Paradise, Inc., E.A. Harrison Properties, Inc., DGC Construction, Inc., and SureTec Insurance Company as defendants. The case involved a tenant's claims against property owners and managers over unaddressed toxic mold contamination at a Sherman Oaks apartment building. The matter proceeded to a jury trial on January 26, 2026, in Department S29 of the Long Beach Courthouse before the Honorable Michele Flurer. At trial, only two defendants remained: Murietta Paradise, Inc. and E.A. Harrison Properties, Inc. Three of the original eight causes of action went before the jury: breach of implied warranty of habitability, negligence, and constructive eviction.
Cause
This case arose from toxic mold exposure at a Sherman Oaks apartment. Steven Varkony leased Unit 204 at 4510 Murietta Avenue, Sherman Oaks, California 91423, from El Dorado Villas, LLC on August 3, 2013, at a monthly rent of $2,700. In late May 2019, Varkony noticed a black substance growing on a hallway wall near his bedroom. He reported it to the defendants, who sent DGC Construction to inspect the property on May 30, 2019.
On June 1, 2019, DGC Construction's representative, Doug Castro, cut open the wall on the bathroom side without first testing for asbestos. Castro claimed there was no mold, despite visible, black-colored growth on the hallway side. He placed a loose piece of plastic over the hole and laid paper on the floor between the bathroom and the front door. Varkony slept in the living room on June 1 and June 2, and by June 3 he experienced difficulty breathing.
Varkony hired Air Lab Consulting at his own expense on June 3, 2019. The testing firm informed him that the containment DGC Construction built was inadequate and ineffective. Lab results confirmed elevated levels of Aspergillus/Penicillium, Cladosporium, Chaetomium, and Botrytis mold in the master bathroom, master bedroom, and hallway/dining room.
That same day, Varkony contacted defendants and explained that the containment was failing and that he was having breathing problems. According to the complaint, defendants' property manager Tanya Zimmerman, an employee or partner of E.A. Harrison Properties, yelled at Varkony, denied the presence of mold, and told him to call the Apartment Renter Association if he did not like it. Defendants refused to reimburse Varkony for temporary housing. He moved into a hotel at his own expense for roughly two weeks and never returned to live at the property. He removed his belongings on August 1, 2019.
Injury
Varkony alleged he developed asthma, chronic fatigue, loss of smell and taste, difficulty breathing, and cognitive impairment as a result of prolonged mold exposure. He also alleged damage to personal property and food from mold contamination throughout the unit.
Damages Sought
Varkony sought past and future medical expenses, rent abatement, hotel and relocation costs, storage fees, cleaning expenses, environmental testing costs, loss or damage to personal property, and past and future noneconomic damages for physical pain, mental suffering, loss of enjoyment of life, and emotional distress. He also requested attorneys' fees and prejudgment interest.
Key Arguments and Proceedings
Legal Representation
Plaintiff: Steven Varkony
· Counsel for Plaintiff: Eric B. Strongin | Jeffrey P. Schwalbach
Defendants: Murietta Paradise, Inc. | E.A. Harrison Properties, Inc.
· Counsel for Defendant: Christian J. Gascou | Ronald W. Hopkins | James C. Castle
Claims
Varkony originally filed eight causes of action in May 2021, including breach of implied warranty of habitability, nuisance, breach of contract, negligence, fraud and concealment, negligent misrepresentation, intentional infliction of emotional distress, and constructive eviction. Three claims proceeded to the jury at trial: breach of implied warranty of habitability, negligence, and constructive eviction.
Breach of Implied Warranty of Habitability
Varkony argued that defendants breached the implied warranty of habitability under California Civil Code Section 1941 and Health and Safety Code Section 17920.3. The property contained visible mold growth, dampness in habitable rooms, and general dilapidation from improper maintenance. Rather than properly remediating the mold, defendants relied on makeshift repairs that failed to address the underlying contamination.
Negligence
Varkony contended that defendants owed him a duty to maintain the property in a safe and habitable condition, to disclose the dangerous mold conditions, and to remediate those conditions in a reasonable and timely manner. Defendants breached those duties by sending an unqualified contractor, allowing inadequate containment for thirteen days, and refusing to arrange proper mold remediation.
Constructive Eviction
Varkony maintained that defendants' failure to make timely and appropriate repairs, combined with the spread of mold spores throughout the unit, rendered the property uninhabitable and forced him to vacate.
Defense
The reviewed documents did not contain specific defense arguments from Murietta Paradise, Inc. or E.A. Harrison Properties, Inc. at trial. A separate defendant, SureTec Insurance Company, filed a general denial and nineteen affirmative defenses in July 2021, but SureTec was not among the defendants at trial.
Jury Verdict
The case went to trial on January 26, 2026, in Department S29 of the Los Angeles County Superior Court, Long Beach Courthouse, before the Honorable Michele Flurer. A twelve-person jury deliberated and returned its special verdict on February 6, 2026, ruling entirely in favor of Varkony.
The jury found that both Murietta Paradise and E.A. Harrison breached the implied warranty of habitability and that the breach harmed Varkony. The jury also found both defendants negligent and determined that their negligence was a substantial factor in causing Varkony's harm. On the constructive eviction claim, the jury found that both defendants failed to repair and keep the property suitable for the purposes for which it was leased, and that both wrongfully interfered with Varkony's right of use or enjoyment of the property.
The jury found that Varkony was not negligent and assigned zero percent fault to him. It apportioned 25 percent of responsibility to Murietta Paradise and 75 percent to E.A. Harrison.
The jury awarded $91,170 in total economic damages, broken down as follows: $12,140 in past medical expenses, $6,000 in future medical expenses, $3,285 for environmental testing, $4,645 for hotel expenses, $43,000 in storage fees, $2,684 in moving expenses, $1,678 in cleaning expenses, $11,338 for loss or damage to personal property and food, and $6,400 in rent abatement.
The jury awarded $2,182,100 in total noneconomic damages: $1,561,600 for past noneconomic loss and $620,500 for future noneconomic loss.
The grand total damages awarded came to $2,273,270.
The court ordered both defendants jointly and severally liable for the $91,170 in economic damages. Under California Civil Code Section 1431.2, the court held the defendants severally liable for noneconomic damages in proportion to their fault: $545,525 against Murietta Paradise (25 percent) and $1,636,575 against E.A. Harrison (75 percent). The judgment carried interest at ten percent per annum from the date of entry, with costs and attorneys' fees to be determined. Judge Flurer signed the judgment on February 25, 2026.
Court documents are available upon request at [email protected]
