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Federal judge finds for owners of drywall-damaged homes

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SUN CITY CENTER – In the first known judicial opinion favoring Chinese drywall victims, a federal judge has clarified remedial issues and held out hope for local beleaguered homeowners. This is the view of leaders on the drywall front here after reviewing a 108-page “Finding of Fact and Conclusions of Law” issued late last week by Judge Eldon Fallon, sitting on the federal district court bench in Louisiana’s Eastern District.
Fallon’s opinion is part of a national class action and consolidation of a number of contaminating drywall legal claims from around the country into a case brought by seven Virginia plaintiffs. These homeowners in the Williamsburg, Newport News and Virginia Beach areas, whose single family, duplex and townhouse dwellings were built with and contaminated by Chinese drywall, complained of corrosion destroying appliances, foul odors and health-related problems. Among them are cancer survivors, some driven to bankruptcy, some facing foreclosure by mortgage lenders, some working multiple jobs, some retired, several with young children – all of them sustaining property and personal damages because they unwittingly bought a home built with Chinese drywall.
The case names as defendants the Taishan Gypsum Co., Ltd., Tobin Trading, Inc., Venture Supply, Inc., Harbor Walk Development LLC and the Porter-Blaine Corp. Fallon found the defendants guilty of negligence, breach of express or implied warranties, unjust enrichment and violation of U.S. consumer protections.
As part of his conclusions, the federal district judge awarded a total recovery to the seven plaintiffs of a little over $2.6 million. Finding that each plaintiff sustained economic damages in the $250,000 to $390,000 range, Fallon tailored his awards to give each the funds to cover a six-month remediation of the home, plus another $100,000 each in recognition of “the loss of use and enjoyment” suffered by each family.
At one point in his lengthy review of the circumstances, Fallon stated “…the Court finds that scientific, economic and practicality concerns dictate that the proper remediation for the Plaintiff-intervenors is to remove all drywall in their homes, all items which have suffered corrosion as a result of the Chinese drywall, and all items which will be materially damaged in the process of removal.”
Woody Nelson, former Sun City Center CA director and advocate for victims of the contaminated drywall, said this week he sees the words as very encouraging, perhaps even signaling “a light at the end of the tunnel.” Nelson, who founded the local Contaminated Drywall Coordinating Group (CDCG) two years ago to search for solutions on behalf of victims, called Fallon‘s legal findings and financial awards to the Virginia victims “the best news to date.”
Another CDCG activist, Roy Glaum, also found several heartening statements in the Fallon document. The judge, for instance, noted that conditions set in motion by the contaminating drywall can lead to a fire risk “…making the homes hard, if not impossible, to live in.” At another point, the judge classified the plaintiffs’ homes as “severe industrial corrosive environments,” the highest level of such contamination. Fallon also stated without equivocation that “…by any recognized standard, high levels of corrosive gases are present in the representative homes.” Then, continuing his evaluation of the multiple aspects of contamination, the judge asserted “Corrosion on active residential wiring is a violation of the national safety code as well as the safety and building codes of various states.”
All in all, Nelson and Glaum agreed, Fallon’s formalized statements provide a standard of failure in drywall damaged homes and create a foundation for pressing future claims, if not establishing a legal precedent useful in litigation to come.
However, both also recognized that obtaining actual cash in hand to initiate remediation of contaminated homes and compensate for other losses depends on implementation of the judge’s financial awards by the seven Virginia plaintiffs. And both acknowledged that while the U.S. District Court might have jurisdiction over a U.S. company, it cannot force any settlement by a Chinese company.
When it comes down to dollars, though, Glaum said the judge’s computations do provide a guideline for determining remediation costs in other locales. Fallon’s calculations set remediation at $86 per square foot in the seven Virginia homes, the former financial planner added. This square footage figure might be a little less in Florida, Glaum noted, but gives a starting point nonetheless.
However, moving from that starting point to instituting real remediation in any of the 80 contaminated homes in the Sun City Center-Kings Point communities certainly is not around the corner, Glaum cautioned. In fact, at this point in time, he said he does not anticipate any dollar and cents help for SCC-KP homeowners who have suffered the same damages as the Virginia plaintiffs coming directly from the class action. Nor does he foresee any governmental help on the horizon in the form of community block grant money, for instance. Hillsborough County receives about $3 million in community block grant funds each year, with 70 percent of it earmarked for Section 8 or subsidized housing for the poor. The remaining 30 percent, even if dedicated to drywall contamination removal, would remediate maybe six or seven dwellings per year, he estimated. About 400 Hillsborough County houses, all told, have been affected by the imported drywall.
The best financial hope for local victims yet may come through the WCI trust for drywall damage containment established as part of the developer’s bankruptcy proceeding. While the initial trust funding is nearly depleted, Glaum said, the developer also assigned its rights under agreements with its insurance carriers to the trust. An attorney in Texas now is pursuing those carriers for settlement of drywall remediation claims, he added. The Observer attempted to contact that attorney but was not successful before this week’s deadline.
Meanwhile, Nelson and Glaum said the CDCG would continue its campaign to focus political and public attention on the injustices of bad drywall on behalf of the SCC and KP homeowners, some of them trapped in their damaged homes, unable to afford another dwelling , unable to sell a devalued property and unable to get help with the expensive remediation.
Copyright 2010 Melody Jameson

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