Keeping tabs on litigation
To track progress of the multi-district litigation under federal Judge Eldon Fallon in New Orleans, visit their website at 1.usa.gov/ZGibKi
Robyn Ellington gives a derisive laugh when she hears people say the saga of defective drywall is over, affected homeowners have been compensated and it’s time to stop whining.
After all, a $1 billion global drywall settlement reached in a lawsuit between about 10,000 drywall homeowners and Knauf Tianjin, a major Chinese drywall manufacturer, along with suppliers, insurance companies and home builders, is no small chunk of change. It should be enough to wipe away troubles for those unfortunate enough to have homes built with the defective product. Nothing could be further from the truth, she said. “I haven’t seen a dime yet.”
She spoke late last week from her home in Montana, near the Canadian border. It’s about as far from Cape Coral and the home she owned with Chinese drywall as you can get, and still be in the continental United States.
Ellington, a former Realtor, is one of thousands who fell through settlement cracks. They remain plaintiffs, but they had drywall made by another Chinese manufacturer, or their homes were foreclosed upon, sold in a short sale or abandoned. Others fixed their homes at their own expense (average cost $100,000) and seek compensation.
The drywall, imported mostly between 2004-08, emits sulfur compounds that corrode air conditioning coils, electrical wiring, metal appliances, electronics, jewelry and plumbing fixtures.
Residents of homes with the drywall complain of health issues from nosebleeds to respiratory problems.
Lee County has often been called the epicenter of the drywall problem, with at least 1,500 homes affected. Florida has the highest number of drywall homes.
The global drywall settlement was reached in 2010, but finalized in February by federal Judge Eldon Fallon. He presides over the 10,000 lawsuits consolidated in multidistrict litigation in New Orleans. Knauf Tianjin is the only manufacturer to pay for fixing some of the homes. About 2,900 have been fixed so far, including some in Lee.
Another 4,000 consumers had Taishan Gypsum or drywall from other companies that are linked to the Chinese government. They claim U.S. courts have no jurisdiction over them or their product.
A lot of people hear about the settlement and think, “Well, all these people are being taken care of now,” said Richard Kampf ,a Cape Coral homeowner who heads a coalition of about 350 drywall homeowners. “They’re not. It’s only a small percentage.”
Ellington had Taishan Gypsum in her home. She moved out as soon as she found out the home had the defective dryall and eventually sold it in a short sale. She hopes for compensation from Taishan,.
“Nobody’s paying me,” said Gilbert Villaverde of Cape Coral. He moved into his new home in 2006, built with Taishan drywall. It was paid for with money from selling his former home in New Jersey. He moved out shortly afterward when one of his sons developed asthma symptoms. Villaverde ended up fixing the home using his $150,000 retirement nest egg. Now he lives in a rental property he owns and rents out the renovated house.
“I’m hoping to get only what I have spent,” he said.
Kampf is one of the fortunate homeowners. He had 100 percent Knauf drywall, fixed his home at his own cost, and was eventually reimbursed by Knauf.
Those who have less than 100 percent Knauf will only be compensated for a portion of the renovation, according to the settlement. For example, if a homeowner has 50 percent Knauf and 50 percent other Chinese drywall, then they may have 50 percent of the renovation paid for by Knauf and the rest is up to them. Knauf also will provide $8.50 per square foot for an average size home (2,000 square feet) to help pay for a homeowner’s costs while their home is being renovated.
Attorney Allison Grant, who represents about 1,000 drywall clients across the state, including about 300 in Southwest Florida, said the settlement was never meant to be a complete solution. “There were people who thought this was the end-all, be-all who were extremely disappointed,” she said.
But the settlement helps, and the litigation continues, she said.
A ruling by Fallon and an earlier ruling by a Miami-Dade state Circuit Court Judge Joseph Farina say Taishan Gypsum falls under the jurisdiction of federal courts. Taishan appealed the ruling to the 5th U.S. Circuit Court of Appeals in New Orleans.
“The court of appeals will either say yes, the court has jurisdiction and then we can go to trial or say, it’s too bad, you’re out of luck,” even though the Chinese companies made millions at expense of U.S. homeowners, said Russ Herman, lead attorney for the plaintiffs in the multi-district litigation.
The appeals court may not rule for a year, he said.
Meanwhile, Ellington cools her heels in Montana. “The stress of it all is just ridiculous,” she said. “I might as well wait here as anywhere else on the planet.”