SOME QUESTIONS TO ASK WHEN INTERVIEWING A LAWYER |
Click here for a WPTV Channel 5 video and transcript on Chinese drywall featuring Allison Grant, Esq., the founder of Chinesedrywall.com |
* Do I have to fix my house if the builder has agreed to do so? No, however, if you chose to do so, do not sign anything without understanding your legal rights. You should also understand that there is no approved remediation protocol and there have been recent reports of "remediated homes" that remain reactive (i.e., copper is still corroding). * Do I have any recourse against my builder if he filed for bankruptcy? You may, although time is of the essence. You must file a Proof of Claim. If the claims bar date has passed, you still may be able to file a motion to seek to deem a late claim timely filed. * What should I do if I am purchasing a home built between 2001 and the present? In addition to standard disclosures, you may want to ask the seller to identify all electrical and A/C repairs, including the date and nature of the repairs. Specifically, ask the seller to disclose if he/she has replaced any appliances. Finally, ask the seller to disclose all complaints (formal or informal) made to the builder or his/her insurance company relating to any defects or conditions present in the home. * Am I required to pay my mortgage if I cannot live in my home? Unfortunately yes, but due to the extraordinary circumstances, some banks will agree to suspend payments for a period of time. Note, this may negatively affect your credit. Check with the bank before signing an agreement. The U.S. House of Representatives has passed a measure that calls for HUD to study: (1) The availability of property insurance for residential structures with Chinese drywall and (2) the effects of the presence of Chinese drywall on residential mortgage foreclosures. This measure is an amendment to the Mortgage Reform and Anti- Predatory Lending Act, H.R. 1728. * Why was my claim with under my homeowner's insurance policy denied? While most homeowners’ insurance policies provide dwelling coverage on an all-risk basis, property insurers contend that coverage for Chinese drywall is precluded because of various exclusions contained in their policies. The most common exclusion relied upon concerns pollution - that is any loss caused by the discharge, dispersal, seepage, migration, release or escape of pollutants (which term is usually defined to include any solid, liquid, gaseous or thermal irritant or contaminant) is excluded. However, the release of sulfur gases in an indoor environment (such as your home) arguably does not constitute the type of traditional environmental pollution contemplated by this exclusion. For this reason, along with several others, the pollution exclusion may not apply to losses caused by Chinese drywall. There are numerous other exclusions often relied upon by property insurers, including losses caused by faulty, inadequate or defective construction or defective materials. Here too, there are reasons why these exclusions may not apply. While the courts have not decided these insurance coverage issues, it is important to bear in mind that it is the insurer, not the homeowner, who has the burden of proving the applicability of an exclusion and that any ambiguity will be interpreted against the insurer. Many homeowners ask whether they should file a claim with their property insurer even though it is a foregone conclusion that their claim will be denied. First, it is not a foregone conclusion as briefly discussed above. Second, without a timely claim, homeowners will lose their rights. Further, it is important to file claims with all property insurers (e.g., your home was initially insured by Insurer A, but is now insured by Insurer B). Claims should be filed with both Insurers A and B. |
3 Reasons Why Class Actions are Bad
for Homeowners with Chinese Drywall
Published on April 22, 2009 by Scott Wolfe Jr.
http://chinesedrywallblog.com
It Won’t Replace Drywall…Or Resolve Itself For Years
The class action suits have mostly named huge foreign manufacturing companies responsible for creating or exporting the
defective drywall. It’s virtually guaranteed that these large-scale suits won't resolve themselves - much less get properly
organized - for years.
Moreover, during the interim period homeowners will not receive any help in getting the defective (and potentially
dangerous) drywall out of their homes. . .
There Are Collection Problems
. . . After all the legal complexities and procedural hurdles are dealt with (read: time and money), if the class action
plaintiffs are then able to persuade a court that these foreign manufacturers are liable…it might simply be downright
difficult to enforce those civil judgments.
Time Is Ticking
Finally, time is now ticking on Chinese Drywall claims. The class action suits may be giving builders, suppliers and
homeowners a bit of false security that all will be well with respect to these claims, allowing the statute of limitations on
potential claims and defenses to steadily approach a closing date.
Copyright © 2008. Chinese Drywall Marketing, LLC. All rights reserved. *The materials on this site are for informational purposes only and are not guaranteed to be correct, complete or up to date. The information on this site does not constitute engineering, legal, medical or any other professional advice, and is not intended to create a professional relationship including, but not limited to, an attorney-client relationship. The hiring of any professional including, but not limited to, an attorney is an important decision that should not be based solely upon this website or any advertisement. Before you decide to hire a professional, ask for information regarding his/her qualifications and experience. Chinese Drywall Marketing, LLC does not endorse or support any product or organization linked to this website, nor is Chinese Drywall Marketing, LLC responsible for the content of any website promoted in or ad published on this website. |
*Allison Grant, Esq. is a partner with Shapiro, Blasi, Wasserman & Gora, P.A. 7777 Glades Road, Suite 400 Boca Raton, Florida (561) 477-7800 help@chinesedrywall.com |
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| THE LEGAL CORNER by Allison Grant, Esq.* agrant@sbwlawfirm.com (561) 477-7800 |
This is the "$64,000 question." Here is
what has been reported:
A. In 2005, workers (such as installers) were
complaining to employers that the drywall smelled bad,
looked different and was falling apart. Workers were
also suffering health effects as a result of handling and
storing Chinese drywall as far back as 2005.
B. In mid 2006, some builders were purportedly refusing
to use Chinese drywall.
C. In late 2006, some air conditioning manufacturers
started refusing to honor warranties. They advised some
builders that excessive and repeated failures of new
cooling systems were caused by something within the
homes.
D. Lennar and its consultant, Environ International,
were investigating and testing drywall in homes as early
as November 2006. See CTEH report.
E. In early as 2007 (and possibly earlier), some
builders were quietly remediating homes that had
Chinese drywall. Others builders hired experts to help
mask the problem, such as the utilization of paint block.
F. In April 2008 (and presumably much earlier),
members of the International Association of Certified
Home Inspectors were discussing the mystery of
corrosion of copper wiring:
G. In August 2008, the Florida Department of Health
had already received complaints regarding Chinese
drywall. On October 2, 2008, Environ International
briefed the Florida Department of Health and numerous
county health departments regarding "an investigation of
sulfur compound emissions from certain imported
gypsum board (wallboard) and related health
considerations." Environ Memo dated October 31, 2008.
Read Fla. Dept of Health E-mails.
| WHEN DID THEY KNOW CHINESE DRYWALL WAS DEFECTIVE? |
welcome to chinesedrywall.com
The first website dedicated to educating the public about Chinese drywall
Class-action complaint to take Chinese drywall concerns to China and
Germany
July 8, 2009 - By Maggie Crane, WINK News
A push to consolidate all Chinese drywall lawsuits is underway right now. . . Right now there are about 100,000 lawsuits
consolidated into one class-action complaint. Florida alone is expected to have about 35,000 cases filed within the next
year. But not all affected homeowners think it's the way to go.
It's called the largest construction defect case in U.S. History. A class-action lawsuit by homeowners affected with
Chinese drywall is scheduled to be heard in September of 2010. "Which for me, is too long," Richard Kampf, a Cape
Coral homeowner with Chinese drywall, says. The toxic drywall is stinking up his home, eating its way through metal,
burning through his finances and sinking into his dreams. . . "We've estimated that it's going to cost $100,000 to $150,000
per home to remediate," Kampf says. Something he doesn't think a class-action lawsuit can deliver. Kampf believes a
better bet is to group homeowners with the same builder under one lawsuit. "I suspect class-action lawsuits will deliver
pennies on the dollar," Kampf says. Instead, Kampf thinks it's going to take major money for homeowners from federal
and state governments. CLICK HERE FOR FULL ARTICLE
Germany
July 8, 2009 - By Maggie Crane, WINK News
A push to consolidate all Chinese drywall lawsuits is underway right now. . . Right now there are about 100,000 lawsuits
consolidated into one class-action complaint. Florida alone is expected to have about 35,000 cases filed within the next
year. But not all affected homeowners think it's the way to go.
It's called the largest construction defect case in U.S. History. A class-action lawsuit by homeowners affected with
Chinese drywall is scheduled to be heard in September of 2010. "Which for me, is too long," Richard Kampf, a Cape
Coral homeowner with Chinese drywall, says. The toxic drywall is stinking up his home, eating its way through metal,
burning through his finances and sinking into his dreams. . . "We've estimated that it's going to cost $100,000 to $150,000
per home to remediate," Kampf says. Something he doesn't think a class-action lawsuit can deliver. Kampf believes a
better bet is to group homeowners with the same builder under one lawsuit. "I suspect class-action lawsuits will deliver
pennies on the dollar," Kampf says. Instead, Kampf thinks it's going to take major money for homeowners from federal
and state governments. CLICK HERE FOR FULL ARTICLE
|
Economic Losses From Chinese Drywall Could Reach $25 Billion,
Insurers Warned Insured portion unclear
By RACHEL BOLES AND RONALD KOZLOWSKI - Published 7/27/2009
* * *
The share of the total that will fall to property and casualty insurers remains unclear. Early analysis suggests that potential
defendants will face a host of coverage issues, and some have large self-insured retentions which will limit recovery from
commercial insurers. . . As legal battles play out, who will end up paying for the billions of dollars of loss?
We are beginning to see the flood of claims, particularly in Florida and Louisiana. Most of these claims are against a
variety of suppliers, drywall installers and homebuilders, in addition to a couple of manufacturers.
• Manufacturers. Unfortunately for homeowners and builders, the manufacturers of the faulty drywall are foreign
companies and it has yet to be seen how they will be held accountable for their defective product. Precedent in other
claims against Chinese companies for defective products suggests there is little chance of recovering damages.
• Suppliers. The supplier is not covered under most construction wrap-up policies and will, therefore, stand alone in a
lawsuit. . .
• Homebuilders. Homebuilders in recent years have been taking larger and larger portions of their risk, which could leave
them with substantial exposure to paying claims before satisfying per-occurrence or even aggregate retentions.
Additionally, recovery from insurance depends on the outcome of coverage questions surrounding pollution and “your
work” exclusions.
• General contractors. Contractors still in business may have some exposure to the claims. In fact, since general
contractors tend to have well-developed insurance programs in comparison to subcontractors, they may find themselves
the targets of lawsuits as plaintiffs’ attorneys seek out deep pockets. They are subject to some of the same policy
restrictions as homebuilders.
• Subcontractors. In the building frenzy after hurricanes, not all subcontractors were licensed and some have gone out of
business. Those with sufficient claims-made insurance coverage may not only find themselves with some direct exposure,
but their general contractors or builders may seek to tap into their coverage under additional insured status.
In the end, the homeowners will be left absorbing any costs they are not able to recoup from other parties. Insurers have
already denied coverage under the homeowner policy, citing the pollution exclusion, according to Florida press reports.
CLICK HERE FOR FULL ARTICLE
| FREQUENTLY ASKED QUESTIONS |
| IS THERE INSURANCE COVERAGE? |
Are Chinese Drywall Losses “Uninsured?”
Published on August 18, 2009 by Scott Wolfe Jr.
www.chinesedrywallblog.com
Late in July, “ClaimsJournal.com” published an online article titled: “Chinese Drywall: Builders and Subs
Face Huge Uninsured Losses.“ The article’s author takes its reader through a number of hot-button issues
related to the insurance coverage available to homeowners and builders for Chinese Drywall damages.
Calling the per house damages “astronomical,” the article warns that many builder and homeowner polices
may exclude damages based on the pollution exclusion or the “your work” exclusion. . .
From our experience in dealing with homeowner and builder claims, it seems the insurance industry is
positioning itself to deny coverage for contaminated drywall exposure. But more troubling than this is that
many homeowners and builders are taking this position as a matter-of-fact.
While there are certainly legal challenges to recover against insurance companies for these losses, the
insurance companies face legal challenges in excluding coverage. Homeowners and builders have two
things on their side: (a) The insurance company has the burden of proving the applicability of its exclusion;
and (b) Any ambiguities will be interpreted against the insurance company. Homeowners and Builders
should not consider the exclusion of coverage as a foregone conclusion, and should place their insurer on
notice of the claim. While litigation may result in coverage applying to this loss, without a timely claim and a
lawsuit to enforce the same, builders and homeowners will lose their rights.
What is Multi-District Litigation (“MDL”)?
MDL is a procedure to consolidate similar cases for the purpose of, among other things,
conserving resources and preventing inconsistent rulings in different courts. All such
cases are assigned to a judge in one federal district court. In June 2009, a panel of
federal judges ruled that lawsuits filed around the country against home builders,
suppliers and manufacturers of Chinese drywall would be transferred to the United
States District Court for the Eastern District of Louisiana, where Judge Eldon Fallon will
preside over discovery and pre-trial hearings.
As one of his first tasks Judge Fallon appointed a steering committee consisting of
several of the plaintiffs' and defendants' lawyers. This committee is responsible for
arguing pretrial motions, deciding which legal theories to pursue and conducting common
discovery. MDL has similarities with class actions, but they are not the same. Unlike a
class action lawsuit where the plaintiffs’ issues are litigated in one case and then the
plaintiffs share in the recovery, MDL cases typically address pre-trial matters, but then
the cases (some of which are individual cases and others are class actions) are
remanded back to their original courts of jurisdiction for trial.
On December 9, 2009, the Plaintiffs Steering Committee filed an Omnibus Complaint
against Knauf Plasterboard Tianjin ("KPT") in the Multi District Litigation ("MDL") in New
Orleans. On February 10, 2010, the Plaintiffs Steering Committee, who has now file
two more complaints for those who have (1) non-Knauf identifiable manufacturers; and
(2) Knauf manufactured drywall, but missed the first deadline. Another Omnibus
Complaint will be filed for those who have Chinese drywall but do not know the
manufacturer.
On February 19, 2010, the first Chinese drywall is scheduled to begin in New Orleans.
This trial involves Taishan Gypsum, a company which is controlled by the Chinese
government. Taishan Gypsum did not respond to the Complaint filed against it so a
default judgment was entered. As a result, Taishan Gypsum cannot contest liability,
however, the court still must determine the damages to be awarded (i.e., what must
be remediated and the cost ). The outcome of this trial will not be binding on other
manufacturers or parties, but it will likely serve as a yardstick for remediation, which may
make future trials on the same issue unnecessary.
____________________________________________________________
Wall Street Journal summarized builders' potential exposure:
Lennar Corp. has confirmed that about 400 of its homes have defective drywall. The
company has set aside $40 million to repair these homes and has said it believes it will
recover $20.7 million from insurance.
WCI Communities, a Florida-based developer emerging from Chapter 11 bankruptcy
proceedings, estimates it has more than 160 homes with Chinese drywall. A trust has
been created to administer claims, which WCI estimates could be as high as $97.3 million.
D.R. Horton Inc. identified 75 homes in Florida and Louisiana that could have the
problem. It set aside $6 million for repairs.
Ryland Group Inc. confirmed it has between 50 and 60 homes in three Fort Myers
communities, with repair costs estimated at $4.5 million to $6 million.
Beazer Homes USA Inc. disclosed drywall problems in 30 homes in southwest Florida.
No repair estimate was provided.
Missing from the list are Centerline Homes, Cornerstone Group, Engle Homes, GL Homes,
Hanover Homes, KB Homes, Majestic Homes, Mercedes Homes, Meritage, M/I Homes,
Pulte, South Kendall Construction Corporation, Standard Pacific, Taylor Morrison and
many more who have been reported to have Chinese drywall in their homes.
MDL is a procedure to consolidate similar cases for the purpose of, among other things,
conserving resources and preventing inconsistent rulings in different courts. All such
cases are assigned to a judge in one federal district court. In June 2009, a panel of
federal judges ruled that lawsuits filed around the country against home builders,
suppliers and manufacturers of Chinese drywall would be transferred to the United
States District Court for the Eastern District of Louisiana, where Judge Eldon Fallon will
preside over discovery and pre-trial hearings.
As one of his first tasks Judge Fallon appointed a steering committee consisting of
several of the plaintiffs' and defendants' lawyers. This committee is responsible for
arguing pretrial motions, deciding which legal theories to pursue and conducting common
discovery. MDL has similarities with class actions, but they are not the same. Unlike a
class action lawsuit where the plaintiffs’ issues are litigated in one case and then the
plaintiffs share in the recovery, MDL cases typically address pre-trial matters, but then
the cases (some of which are individual cases and others are class actions) are
remanded back to their original courts of jurisdiction for trial.
On December 9, 2009, the Plaintiffs Steering Committee filed an Omnibus Complaint
against Knauf Plasterboard Tianjin ("KPT") in the Multi District Litigation ("MDL") in New
Orleans. On February 10, 2010, the Plaintiffs Steering Committee, who has now file
two more complaints for those who have (1) non-Knauf identifiable manufacturers; and
(2) Knauf manufactured drywall, but missed the first deadline. Another Omnibus
Complaint will be filed for those who have Chinese drywall but do not know the
manufacturer.
On February 19, 2010, the first Chinese drywall is scheduled to begin in New Orleans.
This trial involves Taishan Gypsum, a company which is controlled by the Chinese
government. Taishan Gypsum did not respond to the Complaint filed against it so a
default judgment was entered. As a result, Taishan Gypsum cannot contest liability,
however, the court still must determine the damages to be awarded (i.e., what must
be remediated and the cost ). The outcome of this trial will not be binding on other
manufacturers or parties, but it will likely serve as a yardstick for remediation, which may
make future trials on the same issue unnecessary.
____________________________________________________________
Wall Street Journal summarized builders' potential exposure:
Lennar Corp. has confirmed that about 400 of its homes have defective drywall. The
company has set aside $40 million to repair these homes and has said it believes it will
recover $20.7 million from insurance.
WCI Communities, a Florida-based developer emerging from Chapter 11 bankruptcy
proceedings, estimates it has more than 160 homes with Chinese drywall. A trust has
been created to administer claims, which WCI estimates could be as high as $97.3 million.
D.R. Horton Inc. identified 75 homes in Florida and Louisiana that could have the
problem. It set aside $6 million for repairs.
Ryland Group Inc. confirmed it has between 50 and 60 homes in three Fort Myers
communities, with repair costs estimated at $4.5 million to $6 million.
Beazer Homes USA Inc. disclosed drywall problems in 30 homes in southwest Florida.
No repair estimate was provided.
Missing from the list are Centerline Homes, Cornerstone Group, Engle Homes, GL Homes,
Hanover Homes, KB Homes, Majestic Homes, Mercedes Homes, Meritage, M/I Homes,
Pulte, South Kendall Construction Corporation, Standard Pacific, Taylor Morrison and
many more who have been reported to have Chinese drywall in their homes.
| BUILDER BANKRUPT? Do not assume that you are without recourse if your builder has filed for bankruptcy. For WCI homeowners, a Trust has been created which is pursuing claims for more than 700 homeowners. Similar relief may be available for those with homes built by Tousa Homes, Inc. (the parent of Engle Homes). Contact us for more information |