Judge Hears Opening Statements in Chinese Drywall Test Case

Chinese drywall has made the dream of home ownership a nightmare for one Louisiana family. That’s what the judge overseeing the first contested Chinese drywall trial in a New Orleans federal court was told yesterday during opening statements by the plaintiffs’ attorney. The case is intended as a bellwether, or test trail, to help determine property damage issues in other cases against manufacturers.

More than 2,000 families have claims pending in the Chinese drywall multidistrict litigation before U.S. District Judge Eldon Fallon. Since late 2008, the Consumer Products Safety Commission (CPSC) has received about 3,000 reports from residents in 37 states, the District of Columbia, and Puerto Rico regarding defective Chinese drywall. Gases emitted from Chinese drywall are being blamed for significant property damage, including damage to HVAC systems, smoke detectors, electrical wiring, metal plumbing components, and other household appliances. These gases also produce a sulfurous odor that permeates homes, and cause metals, including air conditioning coils and even jewelry, to corrode. People living with Chinese drywall have also suffered eye, respiratory and sinus problems that may be linked to the gases.

The drywall problems have forced many people out of their homes, and some families are dealing with the heavy financial burden of paying both rent and mortgage payments. Those unable to afford additional rent have no choice but to stay in their potentially hazardous homes. Homeowners insurance does not cover damage from Chinese drywall, and builders have estimated that remediating a home with Chinese drywall could cost as much as $100,000.

The first bellwether trial names Knauf Gips and Knauf Plasterboard Tianjin Co. as lead defendants. The lawsuit was filed on behalf of Tatum and Charlene Hernandez of Mandeville, Louisiana. The case is being heard by Judge Fallon without a jury.

The Hernandez family claims that their 1,688-square-foot home was ruined by 180 boards of defective Chinese drywall. Since moving into the home in 2006, members of the family have suffered from headaches and respiratory problems. Their insurer has denied their homeowners’ claim and the builder hasn’t offered any help. The family remains in the home because they can’t afford to pay both rent and mortgage.

While defendant Knauf acknowledges that its drywall was defective, the company disputes the amount of money the Hernandez family is seeking for remediation. According to a report in Business Week, all parties in the suit agree on the need for removing and replacing drywall, moldings, carpets, a granite countertop and electrical switches and outlets. Other claims, such as wiring, appliances and personal property and the cost of repairs are in dispute.

It will be up to Judge Fallon to determine the nature and the scope of the remediation and the cost of repairs. Questions of health issues from the drywall will be handled in a later phase of the litigation.

A decision on what needs to be done to fix the Hernandez home and how much it will cost could help establish values that will guide settlement discussions in the rest of the cases.

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