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 what your builder is proposing to remediate and the legal effect, including your inability to bring future claims. You should be especially cautious if the builder asks you to sign a release for personal injuries. * Do I have any recourse against my builder if he filed for bankruptcy? You may. Please consult an attorney as soon as possible. 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 a thorough home inspection by someone who has experience with Chinese drywall and Seller's Disclosures (many now include Chinese drywall), 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. * Am I required to pay my mortgage if I cannot live in my home? Yes, but due to the extraordinary circumstances, some lenders will agree to suspend payments for a period of time. Note, this may negatively affect your credit so please check with your lender and get any agreement in writing. Homeowners are cautioned to carefully review forbearance agreements. Some lenders are requiring homeowners to agree that any monies recovered in litigation will be made payable to both the lender and homeowner and will require the homeowner to use the settlement proceeds to remediate their home. It is not clear whether lenders are taking into consideration that some of the damages are for reimbursement for personal property and for other out of pocket expenses such as moving and storage. Homeowners are encouraged to contact an attorney to discuss their options. Click here to review Fannie Mae's new policy; Veteran's Benefit Administration is similarly providing relief to homeowners. Click here for Circular * Can I walk away from my house without any further liability? Not unless your lender agrees to release you or waives the right to seek a deficiency judgment. Even if your lender agrees to a deed in lieu of foreclosure or a short sale, the lender has the right to pursue the deficiency (the remainder of the mortgage, plus attorney's fees and costs) against you. The same is true in a foreclosure. Please consult an attorney. Click here for article. * Can I still maintain a claim if my home is being foreclosed? What if I sell my home? Yes, it is possible but evidence must be preserved although the measure of damages may differ. The same is true with a short sale, but there are other important factors to take into consideration, including tax consequences. Please consult an attorney. * Can I go ahead and remediate now and still maintain a claim? Yes, but please consult your attorney first. It is imperative to preserve the evidence. Your attorney may also want to put your builder and other parties in the chain of supply on notice before you begin remediation. * 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. There are numerous other exclusions often relied upon by property insurers, however, there are reasons why these exclusions may not apply. Lawsuits are being filed against homeowner's insurance companies to determine coverage. * The value of my home has decreased due to the Chinese drywall. Can I have my property reassessed? It depends on where you live. Contact your county property appraiser for more information. For those in Florida, if the property is uninhabitable, then the property appraiser must assess the value of the building at $0. See CS/CS HB 965 Real Property Assessment * Is FEMA relief available? Not in Florida. FEMA has denied Governor Charlie Crist's request asking for financial aid for victims of Chinese drywall finding that this is not an emergency or major disaster, but rather a product defect. |
Copyright © 2008-2010. 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 agrant@sbwlawfirm.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 late 2006, some builders were rejecting shipments
of Chinese drywall.
F. In early 2007, KPT replaced about 2.2 million square
feet of Banner Supply's drywall inventory after Banner
complained to the manufacturer about emissions from
the drywall. Unless a builder who received the drywall
supplied by Banner complained, Banner apparently
failed to notify anyone else of the problem. CLICK
HERE FOR STORY.
G. 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.
H. 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:
I. 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
|
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 The foregoing is general information and does not constitute legal advice. Please consult an attorney. |
| IS THERE INSURANCE COVERAGE? |
A fifth Omnibus Complaint was recently filed in the MDL against all insurance companies for
builders and installers to determine insurance coverage. We will provide details as they
become available. Click here for an excellent article discussing common exclusions in
commercial general liability policies.
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 MDL. The Plaintiffs Steering
Committee has since filed three more complaints for those who have (1) non-Knauf
identifiable manufacturers; (2) Knauf manufactured drywall, but missed the first deadline;
and (3) those who have Chinese drywall but do not know the manufacturer.
To date, over 3,000 federal lawsuits have been filed against manufacturers, distributors,
suppliers and builders, all of which are being heard by Judge Fallon in the MDL.
Homeowners are also pursuing claims against parties other than the manufacturers in
state courts.
GERMANO V. TAISHAN
The first Chinese drywall began on February 19, 2010. This trial involved seven Virginia
families and Taishan Gypsum, who did not respond to the Complaint filed against it so a
default judgment was entered. Another manufacturer, Knauf, intervened in the lawsuit
and defended on behalf of Taishan. On the eve of trial, however, Knauf withdrew from
the case after an adverse ruling by Judge Fallon in which he ruled that the proposed fix
by Knauf was experimental.
On April 8, 2010, U.S. District Judge Eldon Fallon awarded the seven families $2.6
million in damages for homes ruined by Chinese drywall. This ruling only addresses
property damage - personal injuries will be addressed later. CLICK HERE FOR
COMPLETE RULING
While this decision is not binding on anyone other than the parties to the Germano case,
this decision will impact thousands of other homeowners. Unlike the interim guidance
issued by the Consumer Protection Safety Commission (CPSC) in April 2010 which
addressed safety items only, Judge Fallon’s decision sets forth a very detailed protocol
for what needs to be done in order to remediate a home with Chinese drywall, including
removal and replacement of the following: all drywall in the home, all electrical wiring
(insulated and uninsulated), all copper pipes, the entire HVAC system (including the
outside unit), most appliances (particularly refrigerators), electronics, such as TVs and
computers, all carpeting and padding, hardwood and vinyl flooring, and all bathroom
fixtures. After removal of all drywall, properties must be cleaned with a HEPA vacuum,
we-wiped or power-washed, and aired out for 15-30 days; and the property must be
certified by an independent engineering company to certify that the remediated home is
safe.
In May, a Final Judgment was entered against Taishan (which is owned in part by the
Chinese government). Taishan has appealed the decision, which many interpret as
encouraging because for the first time in this case, a Chinese manufacturer is
participating in litigation in the U.S. This may be a sign that Taishan is concerned about
the plaintiffs collecting on the judgment.
HERNANDEZ V. KNAUF
This was the second Chinese drywall trial. Unlike the Germano case, the Hernandez
case was vigorously defended by Knauf. On April 27, 2010, Judge Fallon ordered Knauf
to pay a Louisiana family $164,049.64. Remediation costs were $136,940.46 or $81 per
square foot (the protocol was very similar to the Germano case), plus damage to
personal property (including mattresses and clothing - the sulfur odor could not be
removed even after multiple washings), recurring alternate living expenses, and attorney's
fees (to be determined). On May 10th, a Final Judgment was entered. Knauf has 30
days to appeal. Click here for ruling. Knauf has appealed the Final Judgment.
CAMPBELL V. KNAUF; CLEMENTS V. KNAUF
On the eve of trial, Knauf agreed to settle these cases, both of which involve properties
in Louisiana. Settlement includes full removal and replacement of all drywall, the entire
electrical system and other components in line with the Judge Fallon's decision in
Hernandez v. Knauf, along with out of pocket expenses while the homes are being
remediated. The repair costs will be negotiated with the contractor. In addition, the
owners will receive out of pocket expenses and damages for personal property. Knauf
will pay the attorney's fees. Click here for article; Attorney Gary Mason discusses legal
significance and possible global settlement.
HOW DO THESE DECISIONS AND THE SETTLEMENT IN CLEMENTS AND
CAMPBELL IMPACT OTHER HOMEOWNERS?
These cases do not set a precedent, but they are significant because litigants can expect
similar rulings in the future. With respect to the Clements and Campbell settlements, this
does not mean that Knauf has agrees to a remediation protocol for other cases. In fact,
Knauf apparently intends to use the materials removed from these homes to prove that
pipes and wiring do not need to be replaced.
WHEN WILL MY CASE BE TRIED IN THE MDL?
The plaintiffs in Hernandez, Clements and Campbell and Clement, along with
approximately 2,000 others, are claimants in the MDL case Payton v. Knauf (which is
often referred to as Omnibus I). These three cases were selected by a committee as
bellwether trials or test cases. The objective is to give the parties a preview (good or
bad) of what it can expect in terms of rulings under different scenarios, which may in turn
assist with settlement. Aside from the bellwether trials, to date no cases have been set
for trial in the 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 MDL. The Plaintiffs Steering
Committee has since filed three more complaints for those who have (1) non-Knauf
identifiable manufacturers; (2) Knauf manufactured drywall, but missed the first deadline;
and (3) those who have Chinese drywall but do not know the manufacturer.
To date, over 3,000 federal lawsuits have been filed against manufacturers, distributors,
suppliers and builders, all of which are being heard by Judge Fallon in the MDL.
Homeowners are also pursuing claims against parties other than the manufacturers in
state courts.
GERMANO V. TAISHAN
The first Chinese drywall began on February 19, 2010. This trial involved seven Virginia
families and Taishan Gypsum, who did not respond to the Complaint filed against it so a
default judgment was entered. Another manufacturer, Knauf, intervened in the lawsuit
and defended on behalf of Taishan. On the eve of trial, however, Knauf withdrew from
the case after an adverse ruling by Judge Fallon in which he ruled that the proposed fix
by Knauf was experimental.
On April 8, 2010, U.S. District Judge Eldon Fallon awarded the seven families $2.6
million in damages for homes ruined by Chinese drywall. This ruling only addresses
property damage - personal injuries will be addressed later. CLICK HERE FOR
COMPLETE RULING
While this decision is not binding on anyone other than the parties to the Germano case,
this decision will impact thousands of other homeowners. Unlike the interim guidance
issued by the Consumer Protection Safety Commission (CPSC) in April 2010 which
addressed safety items only, Judge Fallon’s decision sets forth a very detailed protocol
for what needs to be done in order to remediate a home with Chinese drywall, including
removal and replacement of the following: all drywall in the home, all electrical wiring
(insulated and uninsulated), all copper pipes, the entire HVAC system (including the
outside unit), most appliances (particularly refrigerators), electronics, such as TVs and
computers, all carpeting and padding, hardwood and vinyl flooring, and all bathroom
fixtures. After removal of all drywall, properties must be cleaned with a HEPA vacuum,
we-wiped or power-washed, and aired out for 15-30 days; and the property must be
certified by an independent engineering company to certify that the remediated home is
safe.
In May, a Final Judgment was entered against Taishan (which is owned in part by the
Chinese government). Taishan has appealed the decision, which many interpret as
encouraging because for the first time in this case, a Chinese manufacturer is
participating in litigation in the U.S. This may be a sign that Taishan is concerned about
the plaintiffs collecting on the judgment.
HERNANDEZ V. KNAUF
This was the second Chinese drywall trial. Unlike the Germano case, the Hernandez
case was vigorously defended by Knauf. On April 27, 2010, Judge Fallon ordered Knauf
to pay a Louisiana family $164,049.64. Remediation costs were $136,940.46 or $81 per
square foot (the protocol was very similar to the Germano case), plus damage to
personal property (including mattresses and clothing - the sulfur odor could not be
removed even after multiple washings), recurring alternate living expenses, and attorney's
fees (to be determined). On May 10th, a Final Judgment was entered. Knauf has 30
days to appeal. Click here for ruling. Knauf has appealed the Final Judgment.
CAMPBELL V. KNAUF; CLEMENTS V. KNAUF
On the eve of trial, Knauf agreed to settle these cases, both of which involve properties
in Louisiana. Settlement includes full removal and replacement of all drywall, the entire
electrical system and other components in line with the Judge Fallon's decision in
Hernandez v. Knauf, along with out of pocket expenses while the homes are being
remediated. The repair costs will be negotiated with the contractor. In addition, the
owners will receive out of pocket expenses and damages for personal property. Knauf
will pay the attorney's fees. Click here for article; Attorney Gary Mason discusses legal
significance and possible global settlement.
HOW DO THESE DECISIONS AND THE SETTLEMENT IN CLEMENTS AND
CAMPBELL IMPACT OTHER HOMEOWNERS?
These cases do not set a precedent, but they are significant because litigants can expect
similar rulings in the future. With respect to the Clements and Campbell settlements, this
does not mean that Knauf has agrees to a remediation protocol for other cases. In fact,
Knauf apparently intends to use the materials removed from these homes to prove that
pipes and wiring do not need to be replaced.
WHEN WILL MY CASE BE TRIED IN THE MDL?
The plaintiffs in Hernandez, Clements and Campbell and Clement, along with
approximately 2,000 others, are claimants in the MDL case Payton v. Knauf (which is
often referred to as Omnibus I). These three cases were selected by a committee as
bellwether trials or test cases. The objective is to give the parties a preview (good or
bad) of what it can expect in terms of rulings under different scenarios, which may in turn
assist with settlement. Aside from the bellwether trials, to date no cases have been set
for trial in the MDL.
STATE JUDGE RULED THAT INSURER CANNOT DENY HOMEOWNERS' CLAIMS IN
LOUISIANA; FEDERAL JUDGE HOLDS THE OPPOSITE IN VIRGINIA
In Finger v. Audubon Insurance Company, Orleans Parish Judge Medley ruled that the "pollution exclusion
does not apply to Chinese drywall because it was intended to apply to "environmental damage" not damage
from substandard building materials. Judge Mealey ruled that other exclusions (such as "latent defects" and
"faulty, inadequate or defective planning") also do not apply because the drywall still functions as drywall.
Subsequently, in Travco Insurance Company v. Warda, federal judge in Virginia ruled that under Virginia law,
a homeowner's losses caused by Chinese drywall were excluded by the latent defect, faulty materials,
corrosion, and pollutant exclusions. The Court emphasized the narrowness of its ruling and did not rule out
the possibility that other unclaimed losses might be covered under the policy. See opinion.
This issue has been the subject of many court cases and different courts in different states have reached
different conclusions. An Omnibus Complaint is being drafted that will include claims against most
homeowner's insurers.
LOUISIANA; FEDERAL JUDGE HOLDS THE OPPOSITE IN VIRGINIA
In Finger v. Audubon Insurance Company, Orleans Parish Judge Medley ruled that the "pollution exclusion
does not apply to Chinese drywall because it was intended to apply to "environmental damage" not damage
from substandard building materials. Judge Mealey ruled that other exclusions (such as "latent defects" and
"faulty, inadequate or defective planning") also do not apply because the drywall still functions as drywall.
Subsequently, in Travco Insurance Company v. Warda, federal judge in Virginia ruled that under Virginia law,
a homeowner's losses caused by Chinese drywall were excluded by the latent defect, faulty materials,
corrosion, and pollutant exclusions. The Court emphasized the narrowness of its ruling and did not rule out
the possibility that other unclaimed losses might be covered under the policy. See opinion.
This issue has been the subject of many court cases and different courts in different states have reached
different conclusions. An Omnibus Complaint is being drafted that will include claims against most
homeowner's insurers.
