Chinese Drywall Manufacturer Pursues Contractor Settlements

Manatee, FLAs huge numbers of Chinese drywall lawsuits proceed in a massive consolidated action before US District Court Judge Eldon Fallon, legal representatives of homeowners have expressed fear that settling with manufacturers could undermine homeowners' rights.

The 7/16/10 issue of the Bradenton Herald revealed the lawyers' concerns that Knauf Plasterboard Tianjin Co. (KPT) and builders could use their settlements to nudge homeowners into inadequate remediation or waiving their legal rights.

Legal representatives for KPT say such concerns are unfounded.

Two test cases have prompted KPT to pursue settlements with builders. In those two cases, part of the massive consolidation before Judge Fallon, KPT and another manufacturer were instructed to repair homes with bad drywall by gutting them from the inside out and rebuilding the interiors.

Imported from China after contractors couldn't obtain enough domestic drywall in a hot market and a sustained building boom, the drywall emits noxious fumes and turns plumbing coils black. Many homeowners have been forced to abandon their homes.

The two manufacturers are appealing Judge Fallon's ruling in the test cases. In the meantime, KPT is pursuing individual settlements with contractors and builders. It has already arrived at an $800,000 agreement with Beazer Homes USA with regard to 50 homes in Southwest Florida.

A spokesperson for KPT had no comment, although a legal representative for the firm suggested in a written statement that individual settlements between homebuilders and their customers were permitted by Judge Fallon, who had also provide guidelines for such discussions. According to the statement, all discussions have been compliant with Judge Fallon's guidance.

However, legal representatives for homeowners with Chinese drywall problems contend that such settlement attempts are intended to bypass Judge Fallon's rulings and undermine those rulings as the basis for a national remediation standard.

Lawyers for homeowners have petitioned Judge Fallon to set forth rules for settlements between manufacturers and homeowners. Court papers were filed last week in New Orleans. A court date has been set for August 12 to hear the various arguments.