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Drywall deal in the works

Major parties meeting Tuesday

Aug. 22, 2010


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1:10 A.M. — A global settlement could be in the works for thousands of defective Chinese drywall lawsuits.

A mediation involving major parties among plaintiffs and defendants is set for Tuesday by federal Judge Eldon Fallon.

He presides over about 10,000 federal and state cases consolidated in multidistrict litigation in New Orleans.

Coming to the table to talk settlement will be Knauf Plasterboard Tianjin Co. Ltd., a manufacturer of the defective drywall; several homebuilders, suppliers and insurers. The names of the other parties are not being released.

Fallon made it clear when he announced the meeting at his recent August litigation update that he means business and the parties are expected to make headway toward a settlement.

"He said we were approaching an end game," said Allison Grant, a Boca Raton attorney who listened in on the judge's conference call. "He was extremely optimistic," said Grant, who represents numerous cases in Cape Coral and about 500 homeowners across the state.

"I think that what Knauf is trying to do is come up with a pilot program where they pay for remediation and see if that will work on a global scale," said Ervin Gonzalez, a Coral Gables attorney on the plaintiffs' steering committee.

Steve Glickstein, a Knauf attorney, said in an e-mail:

"KPT is participating in good faith, will make reasonable offers to homeowners and hopes that other parties to the mediation do likewise."

Arnold Levin, lead council for the plaintiffs, said he can't speculate on the results of Tuesday's mediation, but he is hopeful.

"It's certainly not going to resolve the entire case. It's just a portion of it," he said. "I think it's a beginning."

Hammering out a deal could finally bring relief to thousands of homeowners - including about 1,400 in Lee County - who have dealt with the drywall dilemma for two years. Many have been trapped in homes they find unlivable, but lack the finances to leave. Others have been foreclosed on.

The drywall, imported mostly between 2004 and 2008, emits sulfur compounds that corrode air conditioning coils, electrical wiring, metal on appliances, electronics, jewelry and plumbing fixtures.

Residents of homes with the drywall complain of health issues from nosebleeds to respiratory problems.

Ty Perez of Lehigh Acres has Knauf drywall and wasn't aware of the upcoming mediation.

"If it benefits us as homeowners, I assume it would be something worth looking forward to," he said.

Perez, his wife and child moved out of their home. He lost a title company and mortgage business. His family has health problems.

"Who's going to pay for all this?" Perez asked.

The mediation is also good news for homeowners with other brands of defective drywall, Gonzalez said.

"Generally when one major player resolves his claims, others follow. Nobody wants to be left holding the bag," Gonzalez said.

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