Chinese Drywall Cases Yield $2.5M Award, Settlements 

In the first jury trial of a case involving Chinese drywall, a Miami-area couple was awarded nearly $2.5 million.

Additionally, drywall manufacturer Knauf Plasterboard Tianjin Co. (KPT) settled two lawsuits in Louisiana.

In Miami, Armin and Lisa Seifart alleged Miami-based Banner Supply Co. knowingly sold them defective drywall.

Banner distributed the Chinese-made drywall manufactured by KPT.

Ervin Gonzalez, the Seifarts’ attorney, said the jury in Miami-Dade District Court found Banner to be liable on the grounds of negligence, public nuisance and unfair trade practices.

Banner attorney Michael Peterson of Peterson & Espino in Miami, said multiple insurance carriers are involved in Banner’s defense, as about 2,800 known claims have been filed against the supplier. The coverage has been the company’s “saving grace,” said Mr. Peterson, as Banner contends with financial difficulties caused by the fallout of Chinese drywall, which is said to emit a foul smell and fumes that cause corrosion to plumbing and electrical components as well as health problems for homeowners.

Chinese-made drywall was used in U.S. construction from 2004 to 2007 after busy hurricane seasons and the housing boom led to shortages of U.S.-made drywall.

Banner is also facing suits from insurers looking to avoid coverage obligations under certain policy exclusions, such as the pollution exclusion, Mr. Peterson said.

“I don’t know what the ramifications will be, but I know in this particular case the jury did not hear all the evidence and we wouldn’t be hearing about this if the manufacturer was in the U.S.,” said Mr. Peterson when asked if the jury award in Florida would set a precedent and pave the way for similar outcomes in other cases.

Banner has also filed suit against Knauf, Mr. Peterson said. The company is exploring its appeal options in the Seifart case, he said. Banner continues to assert it did not have knowledge of the drywall’s adverse effects and was told after tests done by the manufacturer, Mr. Peterson said.

Banner maintains it did not know about the effects of the drywall, but the Seifarts claimed Banner had been working with Knauf to trade its unused inventory of drywall for an American-made product after it received complaints from builders about the smell of the building product.

In Louisiana, Knauf settled two U.S. District Court cases, electing to pay for lost rental income and replace drywall in one unit of an apartment building in Slidell, La., and agreeing to pay for remediation and testing for a couple in Metairie, La.

• • 6/22/2010 8:15:59 AM
  • Doug Alsop
  • Chinese Drywall decision
  • The jury made the correct decision but as usual awarded rediculous sums of money. The award should have been for actual costs involved to replace the drywall and ancillary supplemental housing costs, etc, and not any negligence, public nuisance and unfair trade practices findings. Good luck recovering any of those monies from China....

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