Federal Judge Awards $164K in Damages in Chinese Drywall Case

April 29, 2010

A federal judge in Louisiana has ordered a manufacturer of faulty drywall from China to pay more than $164,000 to a Louisiana family as result of damage to their home from the wallboard.

The ruling is the second time in less than a month that U.S. District Judge Eldon Fallon of the Eastern District of Louisiana has found a Chinese drywall manufacturer liable for damages associated with its installation in American homes.

In the current case, Hernandez v. Knauf Gips KG, et al., case no. 09-6050, Fallon found Knauf Plasterboard Tianjin Co. Ltd. liable for the cost associated with removing the faulty drywall, replacing appliances and furniture, and completely remediating the home of Tatum and Charlene Hernandez of Mandeville, La.

Knauf, a German-owned multinational supplier of building materials, operates a factory in China’s sixth largest city of Tianjun, some 75 miles north of Beijing, according to attorneys for the plaintiffs.

Chinese wallboard has been found to emit toxic sulfur fumes that corrodes plumbing and wiring. It has also been blamed for health problems resulting from the toxic fumes. Federal safety officials have advised homeowners with Chinese drywall to completely remove the tainted product and replace all electrical components and wiring, gas service piping, fire suppression sprinkler systems, smoke alarms and carbon monoxide alarms.

The Hernandez case is one of many brought against homebuilders, developers, installers, realtors, brokers, suppliers, importers, exporters, distributors, and manufacturers from China, which was widely imported into the United States between 2004 and 2006.

Because of the commonality of facts in the various cases, litigation concerning the faulty drywall was designated as multidistrict litigation (MDL). Subsequently, “on June 15, 2009, all federal cases involving Chinese drywall were consolidated for pretrial proceedings in the U.S. District Court, Eastern District of Louisiana,” according to court documents.

On April 8, Judge Fallon, in Germano, et al. v. Taishan Gypsum Co. Ltd., et al., case no. 09-6687, awarded seven plaintiffs from Virginia more than $2.6 million in a consolidated case involving damage to the plaintiff’s homes as a result of the installation of substandard drywall from China.

Tatum and Charlene Hernandez “originally brought a number of claims against Defendant Knauf Plasterboard Tianjin Co., Ltd. (Knauf or KTP) and other named defendants involved with the Chinese drywall in their home. However, the Court later issued an order dismissing all defendants other than KTP without prejudice,” the court explained.

KTP acknowledged that the Chinese drywall in the Hernandez’s home was defective and both parties agreed that remediation was necessary. The issue in this case was the amount of damages and the cost of remediation.

The court ultimately concluded that the extent of remediation included:

  • Removal and replacement of all drywall;
  • Removal and replacement of all components of the HVAC system;
  • Removal and replacement of the entire electrical system;
  • Removal and replacement of all insulation;
  • Removal and replacement of molding, countertops, cabinets, and other items that must be removed during drywall removal, are likely to be damaged during removal, and are cheaper to replace than to preserve;
  • Removal and replacement of copper and silver components in the plumbing system;
  • Removal and replacement of carpet; removal, storage, and reinstallation of undamaged wood flooring; and protection of tile flooring during remediation;
  • Cleaning after remediation, including use of HEPA vacuuming and wet-wiping or power-washing all surfaces;
  • Certification from an environmental consultant; and
  • Any actions incident to or necessary to carry out and finalize the above.

An expert for the Hernandezes determined the cost of remediation would be $200,218.09; Knauf’s expert estimated the cost would be between $53,142.43 and $58,564.93. The court determined the amount to be $136,940.46.

In addition to remediation, the court also awarded damages for replacement of personal property, recurring alternative living expenses, non-recurring alternative living expenses, pretrial repair costs, post-trial repair costs, bringing the total amount awarded to the Hernandezes to $164,049.64, plus reasonable attorneys’ fees.

As with the Virginia homeowners, the Hernandez family is represented by Christopher Seeger and Jeffrey Grand of leading New York plaintiffs’ law firm Seeger Weiss LLP, along with Steven Hermans from the New Orleans firm Herman, Herman, Katz & Collar LLP, and trial attorneys Gerald Meunier and Daniel Bryson.

Louisiana Attorney General Buddy Caldwell filed suit in Orleans Parish earlier this year against multiple Knauf entities, other international and domestic manufacturers, distributors, importers of alleged toxic Chinese drywall. Several builders were also named in the lawsuit.

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