Lawsuits over defective Chinese drywall heading to trial

dmarsteller@bradenton.comMarch 8, 2010 

MANATEE — A lawsuit involving four Manatee County homes is the latest salvo in the legal battle over Chinese drywall, which is about to go on trial for the first time next week.

Taylor Woodrow Homes and Taylor Morrison Homes are suing Scottsdale Insurance Co., contending the insurer should be forced to cover the cost of replacing defective Chinese drywall in homes they built in the Aberdeen, Crystal Lakes, Greenbrook and Oakley Place subdivisions.

The suit is among several hundred cases that are part of a consolidated federal drywall proceeding in New Orleans. One of those cases, a Louisiana family’s suit against a Chinese drywall manufacturer, is scheduled to be the first to go to trial on March 15.

Meanwhile, several federal agencies continue to investigate the drywall, including refuting reports that it was a factor in several deaths. And those agencies, as well as a federal judge, are expected to soon issue protocols for removing and replacing the defective building product.

‘We did pretty good’

The Taylor suit, filed Feb. 23, says the homebuilders hired Nu Way Drywall LLC to supply and install drywall in the four Manatee homes. One of those is owned by Kristin Culliton, who was among the first to blame the drywall for a “rotten-eggs” odor, corroded electrical wiring and air-conditioner coils, and health problems. She sued Taylor Morrison, which built her home on Skip Jack Loop in August 2008; the case was settled late last year.

As part of the settlement, Taylor Morrison agreed to remove and replace the drywall and other components in Culliton’s house and pay monetary damages. The remediation work was about halfway done as of Friday, said Culliton’s attorney, Darren Inverso.

“We’re getting her house fixed and got her some money, so we did pretty good,” he said, declining to say how much because the settlement’s terms are confidential. “We got her 100 percent relief.”

Culliton, who has since moved out of Florida, has no plans to return to the house, Inverso said.

In its suit, Taylor Morrison said Scottsdale — which provided liability coverage to Nu Way — was obligated to, but has failed to help defend Culliton’s suit and others, and cover the drywall replacement cost. The suit seeks unspecified damages.

Neal Sivyer, a Tampa attorney representing the homebuilders, did not return a message left with his office Friday.

Scottsdale referred calls to Nationwide Mutual Insurance Company, its corporate owner. Nationwide spokeswoman Nancy Smeltzer said the company does not comment on pending litigation.

More than 275 federal suits

The suit is among more than 275 that have been consolidated in a New Orleans federal court. So far only one has progressed very far.

In that case, several Virginia homeowners are seeking more than $2.5 million for damages they claim were caused by poorly manufactured and corrosive Chinese drywall.

The defendant, Taishan Gypsum Co., never responded to the suit and did not have attorneys present during a recent two-day hearing that was limited to determining the best drywall fix and cost. Another Chinese manufacturer, Knauf Plasterboard Tianjin Co. Ltd., had agreed to put up a defense in Taishan’s absence.

But KPT abruptly pulled out of the proceedings just before they were to start last month, citing U.S. Circuit Judge Eldon Fallon’s refusal to consider the company’s proposed air-filtration system as an alternative to removing the drywall.

Fallon went ahead with the hearing anyway, and is expected to rule on the homeowners’ bid for judgment sometime in the next few weeks.

His decision could influence how homeowners throughout the United States seek recovery for similar damages in the future. It also could establish a protocol for how to properly remediate — remove, replace and dispose of — the defective drywall.

Fallon also will oversee the first drywall trial. In that case, Tatum and Charlene Hernandez, of North Shore, La., contend KPT manufactured drywall that was “unsafe, defective and inherently dangerous.” The negligence and product-liability suit seeks damages in excess of $25,000 and reimbursement for drywall replacement.

Drywall not linked to deaths

The U.S. Consumer Product Safety Commission and the U.S. Department of Housing and Urban Development also are developing a remediation standard. That should be released within two months, CPSC spokesman Scott Wolfson said.

The agency said it has received more than 2,800 drywall-related reports from 39 U.S. states and territories, with 59 percent of those coming from Florida. At least eight of those reports included the death of someone living in a home with suspected Chinese drywall.

“CPSC has investigated these tragic deaths reported to the agency and there is no evidence to conclude that the drywall was the cause or a contributing factor in these death (sic),” Wolfson wrote in an e-mail to the Bradenton Herald. “We have reviewed the reports, conducted phone interviews and made home visits and there is no link between Chinese drywall and fatalities.”

But U.S. Sen David Vitter, R-La., has urged both the safety commission and the Centers for Disease Control and Prevention to take another look. “A thorough review of all reported deaths would help instill confidence in your efforts and provide relief for many families,” Vitter wrote in a letter sent to both agencies last week.

Sen. Bill Nelson, D-Fla., said affected homeowners also deserve to know the extent of any health threat. “And what they can do to get the problem fixed, so they can live in their own houses,” he said.

The safety commission is continuing to conduct scientific testing of Chinese drywall, which will be used to assess the potential human health risk, Wolfson said. No timetable was given.

The Associated Press contributed to this report.

Duane Marsteller, transportation/growth and development reporter, can be reached at 745-7080, ext. 2630.

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