Chinese Drywall

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Condo Owners Reach $7.2 Million Settlement in Drywall Case

Tom Scarlett • Wed, Aug 07, 2013
Almost 300 Florida condominium owners have reached a $7.2 million agreement with the condo development’s builder over claims that their properties were damaged by toxic Chinese drywall, according to a motion filed in federal district court in Louisiana August 1.

The Florida settlement is part of a massive multidistrict litigation (MDL) that accused developers in the Southeast of using drywall that gave off sulfurous emissions.

Contaminated drywall manufactured in China has been discovered in nearly 4,000 homes across America. The drywall releases toxic gas into the indoor atmosphere of the homes and has been linked to adverse health conditions such as respiratory problems, nose bleeds, asthma and skin irritation. Some owners also complained of damage to their home’s pipes, refrigeration coils and electronics.

Many families have moved out of their homes and faced financial hardship as they have tried to avoid foreclosure on a home that is uninhabitable. Some 10,000 lawsuits that ensued following the breakdown of the drywall were merged into a multidistrict litigation in June 2009.

The settlement would take the Florida condo project, Villa Largo, out of the MDL, according to the motion for approval of the settlement filed Tuesday. The defendant in the case was Coastal Construction of South Florida.

The settlement agreement is “fair, reasonable and adequate, and was negotiated at arm’s length, and most importantly results in the complete remediation of all units at Villa Lago containing Chinese drywall, regardless of who manufactured the Chinese drywall,” the plaintiffs wrote in the motion.

The Villa Lago development was a condominium project built between 2005-07 in Boynton Beach, a town on the southeast coast of Florida. During that period, according to the motion, there was a drywall shortage in the U.S. following the construction booms in the wake of several hurricanes, sending developers to seek out Chinese drywall manufacturers whose products had never been tested in the United States.

The settlements will be pooled into a fund to cover the cost of the damaged homes. It will also pay $3.1 million in attorneys’ fees and court costs,:shock: according to the motion for approval of the settlement.
Preconstruction activity has already begun in some sections of the development, and work could be fully underway in October, the plaintiffs wrote.

“The Coastal settlement is the last piece of a complicated puzzle that, when complete, will enable the entirety of the condominium project known as Villa Lago at Renaissance Commons, to be remediated,” the motion said.

The case is In re: Chinese-Manufactured Drywall Products Liability Litigation, case No. 2:09-md-02047, in the U.S. District Court for the Eastern District of Louisiana.