After seeing damages awarded against it in one lawsuit, a Chinese drywall maker announced last week that it settled a case brought against it by U.S. homebuilder Beazer Homes for an undisclosed dollar amount, with negotiations continuing on additional cases.
Knauf Plasterboard Tianjin (KPT)–through its legal representative, Don Hayden, a principal for Baker & McKenzie in Miami–said the settlement was reached in an attempt to put the issue behind them while assisting with Chinese drywall repair efforts.
"KPT has been in discussions with builders in recent weeks seeking a reasonable solution to repair homes built with KPT drywall," Mr. Hayden said in a statement.
Mr. Hayden confirmed in an e-mail to National Underwriter that the settlement between Knauf Plasterboard Tianjin Company Ltd. and Beazer Homes relates to impacted properties in the two Florida Beazer properties where affected Chinese drywall has been uncovered.
"The settlement is a settlement for present and future property claims in those two communities, in addition to 54 other properties that Beazer has inspected outside the two developments," he wrote.
He did not respond to a request to reveal the dollar-amount of the settlement.
The company said its drywall was imported into the United States within a 10-month period in 2006, and that KPT drywall accounts for 20 percent of all drywall imported from China during that period.
"KPT has developed a reasonable settlement offer to extend to homebuilders that will meet residents' expectations to live comfortably in their houses," the company said in its statement.
"This settlement is further proof of KPT's commitment to cooperate with homebuilders, federal courts, regulators and official organizations," Mr. Hayden said in the statement. "We will continue to work with these parties to ensure concerns pertaining to KPT drywall are addressed and properly fixed."
In the same statement, Kevin Buster, partner at King & Spalding, who represents Beazer Homes, said: "We appreciate KPT's efforts to resolve this issue."
"As part of Beazer's customer service commitment, it has investigated many homes nationwide, and has aggressively reached out to its homeowners in its two affected communities in Southwest Florida," he said. "To date, Beazer has identified fewer than 50 homes with Chinese drywall, all located in those two communities."
Mr. Buster added that "Beazer has proactively developed and implemented a comprehensive repair protocol, has offered that protocol to each of its homeowners where Chinese drywall has been found, and has been repairing the affected homes for some time now."
The settlement follows an April 28 ruling by a federal judge in Louisiana, who awarded $164,000 to a family whose home was affected by Chinese drywall. U.S. District Court Judge Eldon Fallon, in New Orleans, acted after presiding over a non-jury trial in the case of Hernandez v. Knauf, a homeowner's suit against KPT.
The effects of Chinese-manufactured drywall have prompted a plethora of suits alleging the material emits noxious fumes, causing respiratory problems while corroding wiring and other materials.
Judge Fallon said KPT and the plaintiffs had agreed that remediation was necessary, but disagreed on the scope and costs.
He ruled that in addition to removing the problem drywall, the entire electrical system, all copper and silver plumbing components, the HVAC system, affected appliances and consumer electronics, and certain non-electronic personal property would have to be replaced.
The sum awarded covers remediation, personal property, recurring alternative living expenses, non-recurring alternative living expenses, pre-trial repair costs and post-trial repair costs.
The decision came a day after the Louisiana State Senate passed legislation to prevent insurers from cancelling or non-renewing homeowners polices and policies for commercial properties due to the presence of Chinese drywall.
Earlier in April, Judge Fallon awarded $2.6 million in damages and repair costs to seven Virginia families that sued another Chinese drywall manufacturer, Taishan Gypsum Company Ltd. (See http://bit.ly/c1tzQ0 for more details.)
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