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:

1. having the settlement’s appointed contractor to repair their home
2. hiring their own credible contractor or
3. 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 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.

The Woods family purchased their dream home in Liberty Park and lived there not even a year before realizing that there was something wrong.

According to FoxAL.com, the Woods family reported a “chemical” smell in the home as soon as they moved in.  Not long after their air conditioning system failed, a/c coils were found to be heavily corroded, and appliances began to quit working.

The family said that they later found out their home was built with defective Chinese drywall.

The failing appliances and air conditioning problems were the least of their worries when their one year old son starting having health issues.  Chris Wood says, “Our son was only one year old, just couldn’t get healthy.”  The boy constantly had had bloody noses, sinus and respiratory problems. 

The Woods family later decided to move out of the home, after which their son’s health problems seemed to go away.

The family is now part of a class action lawsuit.

Watch the FoxAL.com Report: http://www.myfoxal.com/global/category.aspc=195956&autoStart=true&topVideoCatNo=default&clipId=5462616

According to Businessweek.com, US District Judge Eldon Fallon has said that the pilot program to repair up to 300 homes in Florida, Louisiana, Alabama, and Mississippi built with defective Chinese drywall, which was manufactured by Knauf Plasterboard Tianjin Co., seems to be going well.

One of Knauf’s lawyers, Steven Glickstein said that all parties participating in the pilot program have agreed to pay shares of the cost of fixing the homes. So far 80 homes have been inspected and chosen to undergo repair.

If the pilot program is successful, it is possible that 2000-3000 homes built with Knauf’s drywall might be fixed under this deal.

Glickstein also said that Knauf is prepared to consider compensating homeowners who have already paid to remove Knauf drywall themselves.  The homeowners would have to prove that their homes were built with Knauf drywall and ask for a “reasonable price.”

Russ Herman, a plaintiffs’ lawyer said that repairs to some homes may begin by Christmas.  Repairs are expected to take about 3 months and cost between $40 and  $60 a square foot.  This means Knauf and the participating companies are looking at $30-$45 million in repair costs for the 300 homes, which does not include temporary housing for the homeowners.

Knauf Plasterboard Tianjin, one of the manufacturers responsible for producing defective Chinese drywall, has agreed to repair up to 300 homes in several different states as part of a remediation “pilot program.”  If all goes well, this could be just the beginning.

Homeowners whose homes meet the criteria agreed upon will have the insides of their homes gutted, their families will be relocated, and attorney’s fees shall be paid for by Knauf Tianjin and several other companies who settled on the negotiation.

The homes will be repaired according to the protocol developed by the U.S. District Court under Judge Eldon E. Fallon.  Essentially, all of the drywall, wiring, air conditioning system components, and other components will be removed and replaced.

 Eligible homes:

• Must contain “substantially all”, defined as 95% or more, of Knauf Plasterboard Tianjin (KPT)
• Must be located in Florida, Louisiana, Alabama, or Mississippi
• And must NOT contain any other type of contaminated Chinese drywall

Some Attorney’s are hesitant to take the agreement because homeowners in South Florida, specifically Miami-Dade County, may have difficulty meeting the 95%+ KPT drywall eligibility requirements due to the way drywall was distributed.

According to the Herald Tribune, the federal court has determined the remediation cost to be more than $80 per square foot for an average-size home.  They hope to get a better idea of this cost once the remediation protocol has been implemented.

This settlement gives hope to many homeowners who thought their lawsuits would take years before they received any type of help.  Knauf Plasterboard Tianjin is the only defective Chinese drywall manufacturer who has responded to U.S. court proceedings, reports the MiamiHerald.

Resources

1. View the actual “Settlement Agreement for the Demonstration Remediation of Homes with Knauf Plasterboad Tianjin Drywall“
2. HUD and CPSC Issue Guidance on Repairing Homes With Problem Drywall
3. ChineseDrywallClaims.com
4. Free 5 Step Guide to Determining if your home contains defective Chinese drywall

In a pivotal development,  a Chinese manufacturer has settled its first suit – Knauf Plasterboard Tianjin Co. settled just days ago, on Friday.  Read the source article, from CBS, here.

The settlement was reached with a homebuilder in Atlanta, Beazer Homes USA, inc.  The settlement was reportedly first made known from an email sent by the law firm representing Knauf.  The article from CBS states that more information will be released to the public in coming days.

Knauf is facing numerous lawsuits from homeowners that claim the drywall installed within their home is defective.  Allegedly, the drywall causes corrosion, foul odors, and other issues including potentially health-related symptoms.  But Knauf is not the only company that has faced allegations of dealing in defective drywall.  Other businesses have been scrutinized (and will continue to be so), such as importers, exporters, builders, and so on.  The magnitude of the issue, monetarily speaking, is enormous.  The potential devastation to an already thrashed housing market is a scary thought.

Thechinesedrywalllawyer.com has been covering the multidistrict litigation taking place in New Orleans, as well as developments as they have become available.  One of the primary federal agencies addressing the defective drywall issue is the Consumer Product Safety Commission, which has received over 3,000 complaints to date.

Thus far, plaintiffs have been relatively successful in court. Judge Eldon Fallon ruled that Knauf must pay damages just over $160,000 to one family in Louisiana.  In addition, the same court held that seven Virginia homeowners were entitled to a combined total of over $2.6 million.

According to CBS, the email from Knauf lawyer included the statement, “the settlement with Beazer is part of [Knauf's] effort to get this issue behind them and move forward.”  The settlement shows at least some willingness to correct problems, which can provide at least some hope that other Chinese manufacturers will cooperate in future proceedings.

AL.com recently reported that more than 400 homes in the metro Birmingham area are affected by Chinese drywall. This has led to a large number of lawsuits, as well as a federal consumer products probe. As you can see, Alabama is having just as many Chinese drywall problems as other southern states including Florida and Louisiana.

Although Alabama has not been seen as one of the hardest hit areas, it appears that this trend may be changing.

At this time, no builders in the area have said that Chinese drywall has been found in their homes. Of course, this is bound to change in the near future. After all, somebody had to build the homes, right? It is safe to say that home builders in the area are keeping a close watch on this ever developing issue, as well as the many lawsuits that are being filed.

Stay tuned for more information on Alabama Chinese drywall, as well as how the story in Birmingham unfolds.

After months of scientific testing, the Consumer Product Safety Commission (CPSC) released the results of its investigation Thursday.  The results: federal investigators found higher than normal levels of sulfur and strontium in Chinese drywall samples.  As a caveat, the report did not conclusively link the health problems and reported damages that thousands of U.S. homeowners have reported to the agency with the drywall directly.  Instead of an outright assertion, the CPSC said additional testing was needed and that a new report should be released at some point in November.

Strontium and sulfur have been known to cause health problems though in other contexts.  It seems the CPSC seeks to have definitive test results before releasing a report directly connecting the drywall with health concerns.  Unfortunately, this report which lacked the nexus homeowners were hoping for, has Hampton Roads residents on pins and needles.  One couple reported to WAVY.com that they were essentially using their home as a “storage unit” because of the health problems and sulfur-like odor.

The family’s attorney, Richard J. Serpe (who is also representing other homeowners in a class action suit)  told WAVY.com that he doubted the CPSC will return new reports in several weeks.  He seemed to highlight the sense of urgency of the situation, given the fact that health concerns are implicated.  He said, “When Chinese drywall [and other] toxic substances get into your body, what does it mean?  [Homeowners] can’t [afford] to wait for the years for scientists to figure . . . out [the nexus,] we need to get to it now.”  Not only are homeowners facing potential health concerns, but the presence of Chinese drywall has imposed a dire financial strain on families who have had to vacate their homes, continue to pay the mortgage, and seek refuge in a temporary rental home.

The couple who spoke with WAVY.com is not giving up hope that the scientists will turn around results quickly, and that the situation will be ultimately resolved.  One homeowner, a pastor, told WAVY, “We’re people of faith and that matters for us…what was [released by the CPSC Thursday] was [an acknowledgement] that there is a terribly serious problem that is affecting homeowners in 30 states.”

Homeowners have reported almost 2,000 complaints according to the CPSC, and chairwoman Inez Tenenbaum has stated that the agency is working with the Department of Homeland Security to halt imports of more drywall from China.  Congressional leaders have also taken note of the situation, by seeking to help homeowners in proposing low interest loans.

CPSC October 29 Status Update

The America’s Watchdog group is currently investigating the corrosion of air-conditioning coils, specifically appealing to residents living in Florida since 2002.  The Group noted, “air conditioning coils are supposed to last for 15 years, yet they fail in Florida homes with toxic Chinese drywall once every two years, once a year, or even once every six months…If a homeowner in Florida, lives in a home with toxic Chinese drywall, we want you to call us if you have lost more than two air conditioning coils.”

The group has directed consumers to file complaints at their site, www.chinesedrywallcomplaintcenter.com

The Chinese Drywall Complaint Center has stated that it does not believe major home builders or air conditioning repair servicemen were not on notice of the problems associated with Chinese drywall, dating back to 2004.  The group has also said that due to the health issues widely reported, it is urgent that not just residents – but also builders and inspectors contact the group to report complaints.

The Group has manifested a desire to view homeowner warranty paperwork – specifically if it involves air conditioning coil, electrical, or health issues.  The Chinese Drywall Complaint Center is NOT solely interested in fielding complaints from Florida residents.  They also are “just as interested” in hearing and talking with residents in Virginia, Alabama, Louisiana, Mississippi, and Texas.

The Chinese Drywall Complaint Center has issued a release to healthcare providers, stating that they should stop treating victims of exposure to drywall with flu or cold remedies.  Rather, patients should have tests for sulfide blood levels and be treated accordingly

In a pre-trial hearing in New Orleans, United States District Judge Eldon Fallon ruled against Chinese drywall manufacturer, Taishan Gypsum Co. Ltd., because the company failed to respond to a suit filed by an Alabama homebuilder.

Attorney Ervin Gonzalez commented, “The bottom line is: If you want to do business in the U.S., you have to hold companies accountable. If they’re not willing to appear in a court of the U.S., you shouldn’t be able to do business here.” Ervin Gonzalez is the co-chairman of the trial committee for the MDL panel.

While this may not sound like a big deal, it is an early win for the many homebuilders and homeowners that have been affected by this problem.

What does this mean? Well, for right now the company does not have the ability to defend itself in court. Obviously, this puts the homebuilder in good position to win the case and hopefully receive compensation for all of the troubles that have been caused by this defective material.

At this time, more than 100 homeowners have filed suit against Chinese drywall manufacturers. All of these suits have been brought together to form one “master case” of which Judge Fallon is presiding.

So just how much defective drywall did Taishan Gypsum Co. Ltd. import to the United States? Records show that as much as 7.5 million pounds made its way into the US, through Florida and New York, between the years of 2006 and 2007.

For more information on this news story, as well as other important details check out this story: Judge Rules against Chinese drywall maker.