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Chinese Drywall Firm Will Fix 300 Homes

Source: Miami Herald

Posted on 15 Oct 2010

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The company responsible for making about a fifth of the tainted Chinese drywall that made its way to the United States said Thursday it will pay to repair up to 300 affected homes in Florida, Louisiana, Alabama and Mississippi -- and possibly thousands more across the country in the future.

The agreement could settle suits that might have dragged out in court for the next decade, said Miami attorney Ervin Gonzalez, who represents many homeowners affected by the defective product.

"It's an extremely important start to what will be a foreseeable end,'' Gonzalez said.

But there are questions about to what extent the agreement will benefit South Florida residents, in particular those in Miami-Dade County.
The settlement, announced in Louisiana federal court, says that in select homes, drywall manufacturer Knauf Plasterboard Tianjin and other companies will pay for rebuilding their insides, relocation costs and attorneys fees.

But the agreement also says that to qualify, 95 percent of the drywall in a home must have been made by KPT. Further, for homeowners who are part of a class-action case in Miami-Dade, the agreement says that if a smaller percentage of the drywall in a home is found to be KPT board, then the homeowner would have to reimburse KPT for the corresponding percentage of the price of repairs.

In South Florida, the way drywall was distributed may make the 95 percent threshold difficult to achieve. Some homes contain a mix of boards from many manufacturers or a mix of American-made and Chinese drywall. Some drywall distributors have said they don't have records of what kind of drywall they delivered to which homes.

"I think the pilot program is an important step forward toward the resolution of many of the claims,'' said attorney Victor Diaz, who represents Jason and Melissa Harrell and other homeowners in Homestead who are part of the class-action lawsuit singled out in the agreement. But ``as one of the epicenters of this crisis, it's important that Miami-Dade be included and on the same terms as everybody else. If 50 percent of the drywall contaminated 100 percent of the house, why shouldn't they reimburse 100 percent of the cost?''

Diaz has not signed off on the agreement and said he will continue to negotiate that point with KPT attorneys. ``I would never recommend a homeowner take the responsibility of reimbursing the same company that victimized them,'' Diaz said.

KPT has identified about 40 homes at which repairs could start as early as Monday, including a pair of homes in Lauderhill. About 300 others, including 39 that are part of the Harrell class-action suit, two in Aventura and more in Lauderhill, could be a part of the first group set for repairs. If remediation on the first 300 homes goes smoothly, KPT would consider repairing hundreds more, attorney Gregory Wallance said.

"The 300 homes are intended to be a confidence-building exercise. It will get [homeowners'] attention,'' he said. ``We can rapidly expand it to beyond the 300 homes.''

Along with KPT, other companies involved in drywall distribution or installation are contributing to the expense of fixing homes and paying attorneys fees, which will end some of the suits filed against them as well.
Fixing 300 homes that are 1,800 square feet each would cost a minimum of more than $36 million, but some affected homes are much larger.

"What's it going to cost? We don't care,'' said Russ Herman, a Louisiana attorney who represented plaintiffs from around the country in negotiating the settlement. ``That's Knauf's problem.''

Each house is expected to take two to three months to fix, Herman said. Fort Lauderdale-based construction firm Moss & Associates will handle remediation of at least the first 300 homes.

The agreement won't resolve every lawsuit and claim. KPT is the only manufacturer of defective board that has responded to U.S. court proceedings. Homes with drywall made by other manufacturers, those in which owners have already paid for repairs and those that are bank-owned or in foreclosure will have to be addressed separately.