Insurers plan to settle some Virginia Chinese drywall lawsuits for $13 million. Sulfurous gases emitted from Chinese drywall have been being blamed for significant property damage, including damage to HVAC systems, smoke detectors, electrical wiring, metal plumbing components, and other household appliances.
The settlement, said attorneys involved in the matter, was reached with about 200 area homeowners impacted by Chinese drywall in their homes and some of the companies they had sued, including firms that imported and sold the defective product, said the Virginia-Pilot Online. In this case, Venture Supply and its affiliate, Porter-Blaine Corp. were insured by Hanover Insurance Group. Dozens of other defendants, including contractors, builders, and developers, were insured by Nationwide Mutual Insurance Co. and its affiliates. Settlement negotiations with these companies concluded early this week and covers residential and commercial properties. Venture Supply Inc. imported over 150,000 drywall sheets in 2005-2006 when U.S.-made drywall was in short supply.
The settlement is scheduled to go before a federal judge in New Orleans for preliminary approval; final approval could occur by November 13, wrote the Virginia-Pilot, and some families could see money by the end of this year.
One attorney involved in the case explained that the amount, although a step in the right direction, is still not sufficient to compensate the families for their losses. Also, how the money will be split and if attorney fees are part of that amount, has not been determined, according to the Virginia-Pilot. Some issues are expected to be resolved in federal courts in New Orleans where hundreds of drywall cases are being handled.
Since late 2008, the Consumer Product Safety Commission (CPSC) has received at least 3,924 reports from residents of 43 states and the District of Columbia, American Samoa, and Puerto Rico, regarding toxic Chinese-made drywall. Most of the drywall was imported into the U.S. during the housing boom of the early 2000s.
The Chinese drywall debacle has sparked thousands of lawsuits and the CPSC believes there may be as many as 6,300 U.S. homes with problem drywall; the vast majority of complaints, more than 2,000, have come from Florida, according to the CPSC. Meanwhile, the drywall, said the Virginia-Pilot, does, in fact emit gases that corrode the metal in homes, according to the CPSC, which recommends it be removed.
The legal wrangling over who will cover the cost to repair properties damaged by the defective drywall is in its 38th month, with many homeowners walking away from properties or losing those properties to foreclosure and bankruptcy. In some cases, homeowners have sold their homes for much less than what they originally paid.
Most of the business involved, even if held legally responsible, do not have the resources to repair homes built with Chinese drywall, leading to the dispute centering on insurance covering issues with the drywall, said the Virginia-Pilot. A key issue is that many of the commercial insurance policies that builders and developers hold are constructed with language banning coverage for damages created by pollution. Not unsurprisingly, insurance companies argue that drywall fumes are pollution and not covered. Some homeowner polices are written with similar language.