The Chinese Drywall Saga may finally have a conclusion for Hundreds of Floridian homeowners who will share in a $55 million deal that also accuses a global drywall maker of lying about the product’s safety, according to court documents.
The tainted drywall settlement will be funded by Banner Supply Co., its affiliates and their insurers, which agreed to set aside the money under a preliminary settlement. The drywall caused homeowners some health problems and rendered many homes unliveable as the drywall deteriorated causing serious property damage. A spokeswoman for the plaintiffs’ attorney said the deal covers between 500 and 800 homes which were supplied with drywall by Banner as reported in the Insurance Journal.
The insurers helping fund the settlement are American International Group Inc. unit Chartis, FCCI Insurance Co., Hanover Insurance Group Inc.’s Hanover American Insurance and Maryland Casualty Co., which is part of Zurich Financial Services. The settlement must be approved by a federal judge in New Orleans who is overseeing lawsuits related to the drywall.
Background
Drywall is used to construct walls and ceilings. The tainted product has been blamed for emitting a stench and for producing fumes that damage air conditioning, fixtures and wiring.
The tainted drywall was imported for rebuilding after a series of devastating hurricanes in the middle of the last decade. Plaintiffs’ attorneys have said as many as 100,000 homes are affected in Florida. So this settlement addressing less than 1,000 homes in Florida only may just be the tip of the iceberg for the insurasnce industry and potential settlements.
Home damage and Health Problem Specifics
Many believe that humidity causes the sulfur in the drywall to cause gas to migrate into the indoor air which not only creates a noxious odor, but corrodes copper, such as evaporator coils and tubing, which can ultimately cause your air conditioner to fail. Chinese drywall may also corrode your copper plumbing, copper electrical wiring, and copper water lines. Metals such as chrome, brass and silver may also be affected. Bathroom and kitchen faucets and drains are typically tarnished in homes with Chinese drywall. Homeowners have also been reporting physical ailments, including coughing, irritated eyes, sneezing, sore throat, difficulty breathing, runny nose, bloody nose, and headaches after being exposed to Chinese drywall.
If a client suspects their home might have Chinese Drywall they should look into testing their home immediately. The average Chinese drywall test in Louisiana costs $1,500. Larger homes will have a slightly higher cost.
Settlement Specifics
Banner said in court documents that it has denied liability for the tainted drywall and merely distributed products made primarily by Knauf Group, one of the world’s largest makers of building materials. The German company employs 23,000 worldwide and had 2008 worldwide sales of 5.6 billion euros, according to its website.
Homeowners began to complain to Banner in 2006 of problems with drywall, and Banner notified Knauf, according to court documents. Tests were performed and Knauf assured Banner the drywall was completely safe, the documents said.
As a result of those tests, Banner signed an agreement releasing Knauf from all liability associated with the drywall. However, since then Banner said it has learned that Knauf knew the claims of safety were false and tests actually showed the drywall was contaminated, according to court documents.
Louisiana Court Action
More than 1.1 million sheets of harmful Chinese drywall were used in Louisiana rebuilding projects after hurricanes Katrina and Rita struck in 2005, state Attorney General James Caldwell has said.
Knauf Plasterboard Tianjin Co., one of the company’s units, agreed to help repair 300 homes in Alabama, Florida, Louisiana and Mississippi while Interior/Exterior Building Supply officials agreed to pay $8 million in cash and assign $72 million in insurance rights to consumers who allege the defective drywall ruined their homes.
Russ Herman, a lawyer for homeowners covered by the Knauf settlement in October, estimated repairs to a 2,500 square foot home would cost $60 a foot. With $8.50 per square foot paid to plaintiffs for temporary relocation, the cost for each home might be $171,000, he said in court in October, according to Bloomberg News.
