Manatee consumers who purchased bad drywall from Lowe's see reimbursement

jsalman@bradenton.comOctober 8, 2012 

MANATEE -- When Elizabeth Sullivan saw on TV just months after installing new drywall in her West Virginia cottage that the material may be tainted, the questions began fluttering in her mind.

Is my home safe? Will I need to tear the wallboard down? Who will pay for the repairs?

Luckily for Sullivan, the Manatee area snowbird always saves receipts.

Now, more than two years later, Sullivan had a welcome surprise when she walked to the mailbox last week to find a $250 Lowe's gift card waiting for her as repayment.

"I was completely surprised," she said. "I really thought nothing would ever come of it."

Sullivan is one of thousands of homeowners across the United States who began receiving gift cards in late September as a result of a class-action lawsuit against Lowe's.

The nation's second largest home improvement retailer agreed to a $7.75 million settlement in August 2010 for drywall sold to customers that may have been defective.

The compensation comes as $50, $250 or $2,000 Lowe's gift cards depending on the level of documentation customers could provide, and how much of the bad product they bought.

Those who proved they suffered severe damages by the July 2011 filing deadline could also receive up to $2,500 cash -- for maximum extra benefit refund of $100,000, court records show.

Appeals to the case were dismissed in April, the final judgment was signed in Muscogee County, Ga. court that month, and payments were dispersed in September.

Sullivan plans to use her $250 on a ceiling fan, hallway light fixtures and an edger for her son. Others, however, are still scrambling to fix the mess left by the tainted product.

Lowe's remains adamant the drywall covered

under the settlement was not made in China, which became the focus of separate lawsuits spanning the country for the sulfur gases it emits -- corroding electrical wiring and causing respiratory problems for many homeowners.

In some cases, Chinese drywall problems have caused upwards of $100,000 to fix, according to the U.S. Consumer Product Safety Commission.

"The court-approved, nationwide settlement addressed the concerns of thousands of Lowe's customers while avoiding a potentially lengthy trial," Lowe's spokeswoman Karen Cobb said in an email statement. "The court did not decide in favor of or against anyone, and we don't believe the company sold defective drywall."

More than 40,000 claims from across the U.S. were filed in the class-action suit, which were vetted by a settlement administrator appointed by the court when no proof of purchase could be provided.

Attorneys representing plaintiffs at the Barrett Law Group did not return phone calls seeking comment.

Case administrators said the two-year processing lag for the refunds was mostly fanned by individual appeals that took some time to sort out.

The final settlement figure also grew during that time from $6.5 million to $7.75 million to account for higher total payouts expected when the maximum refund was adjusted.

When first announced, the settlement was slated to pay consumers only $4,500 between Lowe's gift cards and $2,500 cash -- no matter how much drywall they purchased or damage they suffered. That mark was later lifted to $100,000, including $98,000 in cash.

"After the claims were filed and before the final approval, there were some individual appeals that had to be worked on," said Tim Taylor, president of Texas-based Total Class Solutions LLC, which administered the settlement. "Until those were resolved, the judge was not going to allow us to process the claims."

Court records estimate more than 550 million pounds of Chinese drywall has come into the U.S. since 2006, enough to build 60,000 homes.

Several builders continue to fight litigation from homeowners whose properties were nearly destroyed from problems resulting from the defective drywall. Other homeowners have reported severe respiratory problems.

The National Association of Home Builders announced in late September it will oppose stricter regulations with the amended Contaminated Drywall Safety Act.

Josh Salman, Herald business writer, can be reached at 941-745-7095. Follow him on Twitter @JoshSalman.

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