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."