Florida Jury Awards $2.4 Million in Chinese Drywall Case
June 22, 2010 – A Miami-area construction supplies company will have to pay a precedent-setting $2.4 million settlement for damages related to faulty Chinese drywall installed in a local home, a local jury decided Friday.
The plaintiffs sought $4.3 million for damages and losing the enjoyment of their home and claimed the drywall supplier knew about the problems but did not notify customers or legal authorities. The jury based its decision in part on evidence showing officials for the drywall company, Banner Supply, had forwarded customer complaints about drywall to the company’s supplier in China. The Chinese supplier then replaced the remaining supply of Chinese drywall with drywall manufactured in the United States, and Banner Supply officials allegedly agreed not to notify customers or state or federal authorities.
Attorneys representing the drywall supplier argued the firm should not be liable for damages exceeding the actual cost to correct the problem, and the case establishes a precedent in Florida and guidelines for similar cases in other states.
Some Chinese drywall imported primarily between 2004 and 2006 has been found to be defective and contain potentially corrosive elements. But Florida isn’t the only state dealing with the problem. The Louisiana Legislature recently approved a measure protecting homeowners against insurance cancellations due to having Chinese drywall in their homes. If signed into law, the measure would ban homeowners insurance companies from canceling or refusing to renew insurance policies, but insurers may increase insurance premiums or deductible amounts. The proposed law specifically refers to drywall manufactured or imported from China before this year and would impose a maximum $15,000 fine on insurance companies for violations.
Affected by contaminated drywall more than any other state, Louisiana has had thousands of homes equipped with defective drywall manufactured in China, much of which was installed during massive rebuilding efforts after Hurricane Katrina devastated New Orleans and others Gulf Coast cities in 2005.
Officials for the U.S. Department of Housing and Urban Development and the U.S. Consumer Product Safety Commission recently issued an official report recommending homeowners remove all traces of Chinese drywall and replace all electrical wiring and components, gas piping, fire-suppression systems and any smoke alarms or carbon monoxide detectors. The preventive, yet very costly, maintenance is designed to protect homes against potentially corrosive compounds found in thousands of U.S. homes equipped with Chinese drywall.
A recent federal study of 51 U.S. homes equipped with drywall manufactured in China indicates a “strong” link between in-home corrosion and drywall contents. Investigators from the U.S. Consumer Product Safety Commission with the help of Chinese officials recently conducted an indoor air study of dozens of homes recently equipped with drywall manufactured in China. Researchers concluded there is merit to the thousands of complaints the federal agency has received from U.S. homeowners.
Studies indicate hydrogen sulfide gas emitted by contaminated drywall is the primary culprit in corroding copper and silver in homes equipped with Chinese drywall. Researchers also discovered elevated levels of formaldehyde in newer homes – whether or not they had Chinese drywall. Modern cabinetry and carpeting emit low levels of formaldehyde, according to researchers. Although formaldehyde and hydrogen sulfide gas amounts detected were too low to pose safety risks, federal investigators suspect a combination of them and other compounds commonly found in homes potentially might be harmful to structures and public health.
A more recent federal study showed various drywall samples manufactured in China emitted the most reactive hydrogen sulfide with some producing 100 times more of the potentially corrosive substance than drywall from other nations. Although the study discovered several acceptable samples of drywall manufactured in China, samples produced in China during 2005 and 2006 generally fared the worst against non-Chinese products. Samples of drywall manufactured in China in 2009 generally tested much better than earlier batches.
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