Homeowners Complain of Rotten-Egg Smells — and Worse. Other States Likely Involved Also As if there hasn't been enough trouble recently for Florida builders and homeowners, now there's more: Defective drywall imported from China in the boom years of 2004, 2005, and 2006 has spawned a rash of homeowner odor complaints. Sulfur compounds off-gassing from the drywall are blamed for destructive corrosion in hundreds — and possibly tens of thousands — of Florida homes. The damage includes corrosion of copper wiring in walls and household appliances, tarnishing of plumbing fixtures, and corrosion and failure of air conditioner condenser coils, leading to air conditioner freeze-ups and failures. And with some homeowners reporting respiratory symptoms and other possible health effects, the extent of liability could be catastrophic. At least one builder, Lennar Homes, has begun moving homeowners into temporary accommodations, while crews tear out and replace all the offending drywall, along with the damaged wiring and appliances. In January, Lennar filed a lawsuit against virtually the company's entire drywall supply chain, including the Chinese manufacturers, Florida shippers and distributors, and local drywall subcontractors. According to Lennar's formal complaint, the problem drywall was imported and sold by a Chinese corporation called Knauf Plasterboard (Tianjin) Ltd, a subsidiary of the German global building materials giant Knauf Gips KG. Another Chinese company that is unrelated to Knauf, Taishan Gypsum Co. Ltd., is also named in the suit. The text of Lennar's complaint is posted at a website of NBC affiliate WBBH. The court's website includes a list of plaintiffs and defendants.
According to Jordan Chaikin, an attorney with the law firm of Parker Waichman Alonso LLP ( www.yourlawyer.com), Florida seaport records indicate that enough of the bad drywall came into the state to build tens of thousands of houses. Chaikin represents Florida homeowners in a class action lawsuit filed in a Miami Federal court in February. "We're waiting on records from earlier years," he says. "But some of the numbers we have seen so far, from January 1st of 2006 onward, indicate that somewhere in the neighborhood of 550 million pounds of this drywall was imported and offloaded here in the United States. More specifically, the port of Miami is believed to have received most of this Chinese drywall...something in the neighborhood of 113 million pounds of Chinese drywall was delivered to the port of Miami." Throughout Florida, Chaikin estimates, some 50,000 houses could have been built with the Chinese drywall imported into Florida ports in 2006 alone — and if the worst comes to pass, all that drywall may have to be torn out and replaced. "This seems to be one of the biggest problems that...homeowners are facing in the history of the U.S.," says Chaikin. Already, Lennar Homes has replaced the drywall in at least a hundred houses, and the company indicates that it will continue to tear out the material whenever they find it. But Lennar is not the only builder affected, according to Jordan Chaikin. Based on intake interviews with numerous Florida homeowners who have signed up with his firm as plaintiffs in the Federal class action, he says, "we have been able to identify 25 to 30 builders in Florida that have used this defective product in the construction of homes for Florida homeowners." But the builders are not Chaikin's target. "We have not sued Lennar," he emphasizes. "They have their own lawsuit against the manufacturers. We are not suing any builders at this point, and really don't have any intention of bringing the builders in." But Chaikin is asking builders to disclose whatever they find out about the situation: "We want builders to work with us in helping us to go after the Chinese manufacturers and other responsible parties." Chaikin says that there is no indication that any U.S.-manufactured drywall has any similar problems. "We haven't seen any problems with any domestic drywall, whatsoever," he said. "Who knows what's going to come to light as we come forward. But so far, what we've seen is, a lot of it is the Knauf product; and in other cases, some of the drywall that is affected is not stamped with anything. So it's, at this point, difficult to ascertain where it came from." The press reports, the rising storm of publicity, and the lawsuits raise a host of questions with no immediate answers. What's wrong with the Chinese drywall, and why is it different from American-made drywall? Why does the drywall off-gas, and how do the release gases attack wiring and air conditioning coils? How real are the health-related complaints, and what, if any, is the danger to occupant health? How many houses are affected? How can homeowners, builders, and the trades distinguish the bad drywall from drywall that is safe? And when drywall needs to be replaced, who is going to pay for it? Coastal Connection will provide continuing coverage of the Chinese drywall story in the weeks and months ahead. The following are excerpts from a March 6, 2009, telephone interview between Coastal Connection's Ted Cushman and Jordan Chaikin, lead counsel in the class action suit brought by Parker Waichman Alonso. Who is being sued?
"We are not suing any builders. We are asking the builders to cooperate with us in going after the manufacturers of this defective drywall." Listen How can people detect the problem and identify the bad drywall?
"... primarily that rotten egg smell, and secondly — and this is most important — is the evaporator coils. People are having tremendous air conditioning problems ... they say, 'We can't keep the house cool and all the coils are turning black, and we've had to replace the air conditioning three times.' " Listen Is there financial harm other than repair costs?
"In the state of Florida a prospective seller must disclose to a prospective buyer all of the defects and all of the remediation that has occurred with the home. And certainly that would deter a prospective buyer from going in and purchasing the home. So we are looking at a diminution of value claim for that." Listen How much bad drywall is there?
Jordan Chaikin: "From January 1st of 2006 onwards ... somewhere in the neighborhood of 550 million pounds of this Chinese drywall was imported and offloaded here in the U.S."
Listen What makes this Chinese drywall so bad?
Jordan Chaikin: "We believe several things. One of the things that we understand is that the mines that they were mining this gypsum from were very questionable. They were using a lot of questionable materials as well, a lot of waste product. We haven't really gotten into any discovery with them. And once we get into that stage of this litigation, we will learn a lot, lot more."
Listen How did Parker Waichman get to be the attorney for all Florida homeowners?
Jordan Chaikin: "So far there have been three class action lawsuits filed in Federal court here in Florida. What the court will end up doing is consolidating all of the actions into one court somewhere. And ideally, that court will be here where we filed our case. We believe that Southeast Florida is the epicenter of this Chinese drywall issue."
Listen Can the defendants pay?
"We believe that they certainly can pay. The parent company, Knauf, is the biggest manufacturer of building materials and systems in the world. They're huge. We don't think that's even going to be an issue. We believe that there is going to be insurance money there, and that they can pay." Listen