Posted on 27 Jul 2011
A Miami-based distributor of tainted Chinese drywall was ordered by a Broward County judge to fully disclose the details of its insurance policy, as well as the company’s assets, to help South Florida homeowners decide whether or not to partake in a $54.5 million class action settlement.
Judge Charles Greene told representatives of Banner Supply Co. on Monday that the company would have to respond to requests made by the attorneys of Broward homeowners about the terms of its insurance coverage and company assets. A similar hearing will take place in Miami-Dade in September.
Last month, Banner agreed to a $54.5 million settlement to cover claims from affected homeowners, after a federal judge in New Orleans heard a class-action lawsuit against the distributor.
Attorneys for local homeowners have taken the legal battle to state courts, claiming that the federal settlement—which awards up to 32 percent of the total for attorneys’ fees and also allows for other administrative costs—might not be a good deal for homeowners.
“The headlines read ‘$55 million settlement,’ but that is not the reality for the homeowners,” said David Durkee, who is representing several South Florida homeowners with Chinese drywall. “There are many unknown and undisclosed variables that would materially affect how much a homeowner would receive.”
Durkee and attorney Victor Diaz, who were not part of the group of lawyers litigating the class-action case in federal court, have petitioned state judges for more disclosures from Banner about how much insurance coverage it has. The class-action settlement indicated that Banner has about $54.5 million worth of insurance coverage, the same amount as the settlement.
Attorneys for Banner did not respond to requests for comment. The supplier has maintained that it was only a middleman, and has recently filed a lawsuit against the German-based company that manufactured the drywall, seeking more than $100 million in damages.
In 2006, Banner bought more than 100 million square feet of drywall from the manufacturer, distributing it to Florida builders during the housing boom that followed a spate of hurricanes in 2004 and 2005. The product was later discovered to contain sulfur compounds that corroded pipes and electrical wiring, and emitted foul odors.
Homeowners with Chinese drywall supplied by Banner will have 60 days after receiving notice of the settlement to decide whether to opt in or opt out.
Those who opt in will waive their right to pursue further litigation, in exchange for a cash payment yet to be determined.