My question involves a condominium located in the State of: California
A water heater ruptured in an upper floor condo unit. The water was estimated to be flowing unchecked for approx 8-12 hours. Lower units were affected with mostly mild drywall damage. The leak was repaired within 24 hours.
The owners of the upper floor unit have filed a case with their insurance who, in turn, declared that they are not "legally liable" for the damage incurred in the lower floor units because they were not considered "negligent". Their insurance company is unwilling to fully cover all damages.
Over the course of 2-3 weeks, the upper floor tenants paid for an inspector who determined no mold was present inside any of the affected units. However, upon special request by a lower floor tenant, a portion of a shared common area (interior hallway) wall was removed. Mold was found within the wall. This hallway has had a history of water seepage from an unknown source.
Q1. What are the prerequisites for legal liability (what is defined as negligence) and what is validity of the insurance company's conclusion?
Q2. Since mold was found within the walls of the affected unit adjacent to a hallway which has a history of water damage - who is legally liable for the mold damage and why?