Difficulties continue for coastal markets plagued by
defective, Chinese-made drywall.
In Norfolk, Virginia, bad drywall has taken down a large
building-supply business, according to television station WAVY
("
Norfolk business blames Chinese drywall," by Jason Marks).
Sam Porter, owner of Norfolk-based Venture Supply, is out of
business, and held an auction to liquidate the company's assets
in July, the station reports. "Porter was stuck with 65,000
sheets, which ended up going to the dump," reports WAVY. "He
blamed the drywall for putting him out of business." Station
WVEC covers the July auction here
("
What's left of Norfolk drywall business to be auctioned
Saturday," by Vanessa Coria).
Some building officials in Virginia are treating the drywall
issue as falling within their zone of responsibility, reports
the Norfolk Virginian-Pilot. According to the story
("
Chesapeake developer told to tear out Chinese drywall," by
Mike Saewitz), the Chesapeake Board of Building Code Appeals
has ordered a developer to tear out and replace the Chinese
drywall in a newly-built hotel before opening the place for
business..
Drywall issues are complicating real estate transactions in
south Florida, where the market for even the best properties
has crashed hard. The Sarasota Herald Tribune reports on a real
estate dispute involving Chinese drywall in which a buyer
backed out after an inspection revealed the presence of the
material in the home — but the potential seller has
refused to refund a $20,000 deposit
("
Drywall discovery sets off a struggle," by Aaron
Kessler).
Bankrupt homebuilder WCI, headquartered in Bonita Springs,
Florida, has established a multi-million-dollar trust fund to
compensate Chinese drywall victims, reports the Naples News
("
WCI creates trust fund for Chinese drywall claims," by
Laura Layden). Lennar Homes, one of the earliest homebuilders
to identify and address the drywall issue, has set aside $38
million to pay for gutting and fixing houses it built with the
material, reports the Wall Street Journal
("
Home Builder Tallies Up Drywall Claims," by James R.
Hagerty).
In Louisiana, media are following the high-profile case of
New Orleans Saints coach, Sean Payton. In an August 4 press
conference that was mostly about football ("New Orleans Saints
News," reported by Dave Lawrence), Payton expressed frustration
with the lack of progress on the drywall issue in his own home
and others, saying, "It's hard to put it behind you when you're
not living in your house and the builder who built the home is
not doing anything... It's a problem for a lot of people - not
just me - and I know that within the next year, the
class-action suit is going to be heard here in New Orleans. I
know a lot of people are excited to get that process going
because unfortunately there aren't enough people taking actions
for their work."
Added Payton, "We've been out for three or four months.
Right now the home is sitting empty. We've taken all the
drywall out at our expense; we're leasing another home at our
expense; we moved out of our old home. All of those things
we've had to do and other families have had to do have come at
the expense of the consumer - not the builder, not the
supplier, not anyone else that was involved in the manufacture
of the house.... Your only recourse really is litigation. If
the response that you're getting from the builder is a "hands
up" and we're going to wait and the response that you're
getting from everyone else is the same, which is unfortunate,
then you sue those people and that's what we're doing."
Lawsuits have been hobbled so far by a lack of cooperation
from the unfamiliar Chinese legal system, according to the
Sarasota Herald Tribune. Now, U.S. Senators have introduced
legislation that would require foreign suppliers of materials
to maintain offices in the U.S. where they could be served with
legal processes in the event of a lawsuit. Reports the Herald
Tribune ("Bill takes aim at foreign manufacturers," by Aaron
Kessler), "Since the start of 2009, dozens of lawsuits have
been filed by affected homeowners and companies, all of which
have faced similar challenges. Up until just recently, none of
the Chinese manufacturers being sued had been successfully
served abroad."
In the New Orleans courtroom of Judge Eldon E. Fallon,
however, where Federal lawsuits relating to Chinese drywall
have now been consolidated, the Judge has served notice that
time is of the essence, reports the Daily Business Journal
("
Federal Judge Puts Chinese Drywall Cases on 'Rocket
Docket'," by John Pacenti). According to the report, trials
in the case could begin as soon as the end of this year. The
judge has also called for every home involved in the cases to
be inspected.
One complicated issue, however, may be the question of
whether homes with the Chinese drywall should immediately
undergo remediation, before the legal process has run its
course or even really begun. In Florida, Coral Gables builder
Frank Mackle is not waiting, reports the Miami Herald: He has
taken the drywall out and is replacing damaged systems and
restoring finishes — to the tune of 80 grand
("
Drywall woes spur Coral Gables builder to gut his own
home," by Nirvi Shah).
But local attorney David Durkee, who represents homeowners
in some lawsuits, says gutting the house may hurt Mackie's
ability to recover damages. Said Durkee, "The defendant could
claim that there was destruction of the evidence and the
plaintiff may lose the right to bring the action.''
Whether this theory would hold up in Judge Fallon's courtroom,
or on Federal appeal, only time will tell. But in the meantime,
as Mackle notes, the drywall would continue to do its damage to
the home's wiring and other metal components. Said Mackle,
"This is not easy for me to do, but I don't see that I have any
options. It can't be left alone."