A former Army sergeant and his family were awarded more than $10 million Monday, July 1, 2024, after an arbitration panel agreed the moldy home that they leased at Fort Cavazos in Texas caused lifelong health problems for their son. 

A former Army sergeant and his family were awarded more than $10 million Monday, July 1, 2024, after an arbitration panel agreed the moldy home that they leased at Fort Cavazos in Texas caused lifelong health problems for their son.  (Rose L. Thayer/Stars and Stripes)

AUSTIN, Texas — A former Army sergeant and his family were awarded more than $10 million Monday after a private arbitration panel agreed the moldy home that they leased at Fort Cavazos caused lifelong health problems for their youngest son and triggered financial hardship and loss.

The American Arbitration Association panel of three lawyers determined Fort Hood Family Housing, now known as Cavalry Family Housing, and its parent company Lendlease showed a “lack of care or concern for families living in military housing.”

The $10.3 million was awarded to former Sgt. Jason Kiernan, his wife Sarah Kiernan and their three sons to pay for economic damages, mental anguish damages and the housing allowance that the company received to lease the home, according to Ryan Reed, an attorney for the family.

It is the largest payout Reed said he has seen on a military family housing case. One that came close, he said, involved a Marine Corps family in California that was awarded $2 million by a jury in 2019 because of moldy living conditions at Camp Pendleton. A judge overturned the amount months later, calling it excessive.

A federal jury in San Antonio last year awarded an Army officer’s family more than $91,000 for a home that they leased at Randolph Air Force Base with the private landlord Hunt Military Communities. That case only looked at economic damages and did not consider personal injury. The cases of eight other families involved in that lawsuit are pending as it goes through the Fifth Circuit Court of Appeals, said Reed, who also represents those families.

The cases were filed at a time when military family housing was a major talking point in Congress because of the dangerous conditions that some families reported facing. Instead of help, many said the private companies hired by the military to manage housing ignored maintenance requests or were slow to respond.

The military pledged better oversight, and Congress passed several reforms, including a tenant bill of rights with guidelines for a formal dispute resolution process. While a recent survey from the Military Family Advisory Network showed families’ trust in base housing has improved in the last four years, Reed said he continues to get calls and anticipates further litigation will be filed in different parts of the United States.

“In my opinion, what Congress has done — the tenant bill of rights, these dispute resolution procedures — it’s just lipstick on a pig. It’s not meaningfully helping the situation because it’s not clarifying the law, and it’s not vesting the dispute resolution in an outside third party that has real power,” he said.

In the Kiernans’ case, Sarah Kiernan was pregnant in 2019 while living in a home leased at Fort Cavazos, then known as Fort Hood, and required emergency surgery because her son stopped moving. At 2 months old, the boy was flown on a medical helicopter from Fort Cavazos to Dell Children’s Medical Center in Austin, where he spent 20 days in intensive care for respiratory problems.

Jason Kiernan left the Army in November 2020, and the family now lives in New Hampshire, though their son’s health problems have persisted.

Now 5 years old, the boy has lifelong implications of a brain injury that occurred because he did not get enough oxygen after his birth. He suffers seizures, impulsivity and speech delays, and his doctors cannot predict what life will be like as he ages, his mother said.

“I think we all can agree, and we all know that he will never be able to live alone, and he will always need help. I know that’s incredibly expensive,” Sarah Kiernan said. “With this money that they have given us for him, I don’t have to stress about that. I can put that away for him, and he can have that as he gets older.”

Most important, she said it means that once she is gone, her two older sons will not bear the burden of paying for their brother’s care.

Representatives for Lendlease did not immediately respond to a request for comment.

The Kiernans originally filed their case as a lawsuit in June 2020 with 11 other families living at Fort Cavazos. The lawsuit ultimately grew to include a total of 105 families, Reed said.

However, as litigation proceeded, a federal court judge found the lease agreements signed by service members at the base required disputes to be arbitrated by panels that are typically made up of lawyers and former judges.

Aside from the Kiernans, one other family has gone before a panel and had their allegations dismissed because the panel determined they waited too long to bring their case forward.

The panel for the Kiernan family found “overwhelming evidence” that Fort Hood Family Housing and Lendlease gave “a false sense of security that the home was properly repaired and was safe for them to occupy with families and infants,” according to court documents. It also found “false, misleading, deceptive, and unconscionable conduct” by the companies and “contempt and a lack of concern for the Kiernans.”

Evidence indicated housing employees used numeric codes in company maintenance reports to hide references to mold and withheld the company’s prior knowledge of construction or design defects that promoted mold growth in Fort Cavazos homes.

This experience inspired Sarah Kiernan to go back to school to become a mental health care provider, and next year she will graduate as a psychiatric nurse practitioner.

“We’ve experienced such a great deal of mental health and crisis and trauma from all this. When you’re really in the thick of it, and you need somebody to validate your concerns and what’s happened to you, it’s really hard when you don’t have that. I would like to provide that to people,” she said.

The Kiernans’ award was announced Monday just hours after Lendlease announced it was selling its military housing business to Omaha Beach Investment Holdings for $320 million.

That could have an impact on the claims against Lendlease, depending on how the sale contracts are written, and could motivate the company to move quicker to resolution on the pending cases, Reed said. It also shows how much money is available.

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Rose L. Thayer is based in Austin, Texas, and she has been covering the western region of the continental U.S. for Stars and Stripes since 2018. Before that she was a reporter for Killeen Daily Herald and a freelance journalist for publications including The Alcalde, Texas Highways and the Austin American-Statesman. She is the spouse of an Army veteran and a graduate of the University of Texas at Austin with a degree in journalism. Her awards include a 2021 Society of Professional Journalists Washington Dateline Award and an Honorable Mention from the Military Reporters and Editors Association for her coverage of crime at Fort Hood.

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