U.S. District Judge Eldon Fallon has announced a settlement agreement with the German manufacturer Knauf Plasterboard Tianjin Co., which means that thousands of Gulf Coast homeowners will be able to have their homes repaired.
According to the Herald-Tribune, the settlement agreement calls for an uncapped fund to pay for the repairs of 4,500 properties mostly in Florida, Louisiana, Mississippi, and Alabama.
Their will be a separate fund set aside for $30 million which will pay for other losses which include defective drywall related health problems.
ABC News reports that homeowners will have the option of:
having the settlement’s appointed contractor to repair their home
hiring their own credible contractor or
taking a cash payment
A $200 million deposit will be placed into a repairs fund, which will be replenished as needed. Attorney’s fees and costs will be capped at $160 million and will not come out of the homeowners’ portion of their settlement.
The settlement will not go into effect until the deal is approved and signed by Judge Fallon. The approval of the deal could happen as early as January, however it may still be several months before the money reaches homeowners.
A Norfolk Circuit Judge entered a default judgement against the Chinese manufacturer, Taishan Gypsum Co. Ltd., which sold defective drywall used in the construction of homes in Virginia and other states. This is the second ruling against the manufacturer this week.
According to the Virginian-Pilot, the hearing on Wednesday in Virginia Beach Circuit Court involved a couple suing over the drywall, and Thursday’s hearing included more than 170 homeowners in Virginia that currently have cases pending in Norfolk Circuit Court.
Venture Supply Inc., a former drywall supplier in Norfolk, is also being sued for importing the tainted Chinese drywall. Venture Supply named Taishan as a third party defendant and served the lawsuit to the Chinese manufacturer last year seeking a default judgement against the company. This would mean that Taishan could be financial responsibility if Venture Supply Inc., losses the case.
This was the first time that the Chinese company has responded to a Virginia case. Their attorney, Jon Talotta says this is because it wasn’t clear whether or not U.S. Courts had jurisdiction over the Chinese company.
A settlement between the drywall manufacturer Knauf Group and homebuilders who used defective Chinese drywall will result in 800 – 1500 homes being repaired in Gulf states, according to the WashingtonPost. The settlement will involve reimbursements to builders for homes that have already been repaired, are currently being repaired, and those awaiting repair.
NOLA.com reports, as many as 100 homes in Louisiana could be covered under this agreement. The agreement is most likely to affect major local builders who built homes after Katrina with the ctive Chinese drywall.
The settlement will include homes built with Knauf defective Chinese drywall in Florida, Texas, Louisiana, and Mississippi.
The program will not help homes built with defective Chinese drywall by Taishan Gypsum Co.
On Monday, Broward County Circuit Judge Charles Greene, ruled that victims of defective Chinese drywall can file a separate lawsuit against the Miami-based distributor Banner Supply Co. if they are not satisfied with the $54 million Banner class settlement. The Banner class settlement affects about 2,000 Florida homeowners, however the number of victims across the south who are entitled a share of the class settlement is still unclear.
According to BizJournals.com, Judge Green’s order says that every plaintiff must file a notice about whether to be included in the settlement class or not.
Colson Hicks Edison, a Coral Gables-based law firm who is handling the settlement has warned that additional lawsuits against Banner Supply Co would cause the company into bankruptcy. Ervin Gonzalez, an Attorney at Colson Hicks Edison, believes that it is unwise to opt out of the settlement. On the other hand, Miami attorneys David Durkee and Victor Diaz believe that the class settlement will not provide enough money to each victim to repair their homes.
According to the Washington Post, A Florida building supply company, Banner Supply Co., filed a lawsuit against the drywall manufacturer Knauf Gips.
The German manufacturer is being sued for $100 million over defective Chinese drywall. Banner Supply Co. alleges that Knauf Gips made false claims about the quality of the drywall.
Banner Supply Co., supplied most of the Chinese drywall in Florida. Banner Supply’s insurance companies decided to release the policy limits for 3 years resulting in approximately $61 million and they agreed to pay $54.5 million to settle about 2,000 claims in Florida.
According to WinkNews, Cape Coral city officals are waiving building permit fees that are associated with repairing homes with defective chinese drywall which could potentially save homeowners hundreds of thousands of dollars in fees.
Currently they are estimating that there are about 2,000 homes that could have been built with Chinese drywall. The city hopes that this will help prevent people from walking away from their homes.
The waivers apply to:
Homes that were built from January 2003 through December 2010
The homeowner must be the original owner of the home
“We can only deal with the people who are the first time owners and never attempted to walk away or give up on their home,” according to Cape Councilmen Chulakes-Leetz
Defective Chinese drywall; disclosure, assessed value, real estate tax exemption
“Requires licensees engaged by sellers and buyers, and landlords who have actual knowledge of defective Chinese drywall in a dwelling unit, to disclose that information to the prospective tenant or buyer. If a tenant is not provided disclosure within 60 days of discovery of defective drywall he may terminate the lease. The bill also provides, upon confirmation by a building official that defective Chinese drywall is present, that the commissioner or other assessing official may reassess the property accordingly. Local governments may also designate the property as a rehabilitation district for purposes of granting the owner a partial real estate tax exemption. This bill is a recommendation of the Housing Commission.”
In 2009 Dragas Management Corp., a Hampton Roads builder, faced threats by angry homeowners in Chesapeake and Virginia Beach whose homes were damaged by Chinese drywall. Some hired attorneys, while others wrote their own demand letters, urging the builder to fix their homes or buy them back.
Dragas first attempted to notify it’s two insurance companies, but both denied coverage.
So in good faith, Dragas signed remediation agreements with the homeowners to replace the drywall, damaged components, and to compensate them for relocation expenses. The agreement also stated that if the homeowner accepted the contract, they were to drop all property damage claims against the builder.
Dragas has been battling with their insurance companies over coverage ever since. Their first attempt to for a claim for coverage was dismissed, however they were allowed to refile the claim with more detail. After refiling they were granted permission for the case to move forward.
However, a summary judgment by the Norfolk U.S. District Court Judge Rebecca Beach Smith was based on the following fact: “What the court finds decisive at this juncture in this case is that DMC [Dragas Management Corp.] had no ‘legal obligation’ to incur remediation costs ‘as damages,’ and this coverage is not available under any of the policies.”
The insurance companies argued that Dragas did not meet the requirements for coverage because Dragas “was not legally obligated to pay remediation costs as damages as is required to trigger coverage.” Instead coverage is meant to provide businesses against losses as a result of a legal liability and provides relief in the form of a legal defense to a lawsuit.
